Tag Archives: mortgage

Mortgage Mix

Posted by Michael Hughes    April 13, 2010

When you are buying a home it’s challenging to acquire the right kind of financing. Having the right mix of savings, credit score and debt-to-income ratio will improve your chances of securing a loan.

Buyers today are obviously faced with new obstacles to financing. These new restrictions are part of the “hangover” from the 2008 financial meltdown and the easy lending frenzy of the recent past. But obtaining financing is not impossible. A solid job, credit score and savings will make it happen.

Ideally, prospective buyers have at least 6 months of reserved savings with a debt-to-income ratio of no more than 45%. Credit scores of 700 or greater are preferred. Thinking you are going to buy a home in Boulder? Prequalifying is a quick 15 minute conversation. Call me today if you need the names of reputable lenders I have worked with that do a great job.

If you have questions regarding this article or are thinking you will Buy A Home In Boulder please call me 303-359-6627 or e-mail Michael Hughes at Fuller Sotheby’s International Realty in Boulder, CO 



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The Appraisal

The Appraisal

By Michael Hughes December 10, 2009

For first time buyers, buying a home can be a complex and confusing process. If you are working with a realtor, you most likely have been preapproved by a lender. This usually is a quick conversation with a reputable lender regarding your income and credit score.  While preapproved and prequalified have over time become somewhat synonymous, the preapproval is stronger and comes with a letter stating that the lender is confident you will be approved for the loan amount. The preapproval letter Is absolutely necessary when submitting an offer to purchase.

You have probably looked at several homes before finding the right one, in the right condition and in the right location. Then you submitted a purchase offer. After one or several counteroffers, the purchase offer has finally been accepted. Congratulations, you just got part way there.  There are still several steps, which must take place to fulfill the conditions of the purchase agreement. One of the key steps is the appraisal.  In most cases you have already spoken to the lender and understand how much you will need to bring to the closing table at a given purchase price.  The lender, in most circumstances, will want to use their own licensed real estate appraiser. The appraiser will assess the property using an intricate set of criteria to reach the appraised property value. Technically, this value is the opinion of the appraiser of what the property is worth. The result of the appraisal is of paramount importance when it comes to financing your mortgage.

If the property appraises for less than the purchase price, then you will have decisions to make. A couple things can happen; (1)  you can go ahead and pay the amount you offered, (2) you can renegotiate the price to near the appraisal price if the seller is willing to budge or (3) you can cancel the contract in writing before the appraisal objection deadline and your earnest money will be returned to you.

If the property does appraise, the deal moves forward with the other conditions of the contract in place, such as inspection, title, loan conditions, etc.

The appraisal is what I consider the most important piece of the puzzle. It can make or break the deal, depending upon the results. When a property appraises properly everyone will feel at ease and you are well on your way to living your dream. If you have any questions regarding financing, appraisal, inspection objection deadline or buyer tax credits (Must be under contract by April 30, 2010 and close before July 1, 2010) call me.

Contact me today if you or anyone you know in Boulder or the surrounding area needs real estate help or for just a quick question
e-Mail michael.hughes@sothebysrealty.com Direct 303-359-6627 Website: www.bolderrealestate.com

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Filed under appraisal, bad credit, credit cards, decreasing interest rates, employment, Fuller Sothebys International Realty, good credit, increasing interest rates, interest rates, mortgage, real estate, Tax Credit, Uncategorized

New Credit Card Laws Go Into Effect February 22, 2010

New Credit Card Laws Go Into Effect February 22, 2010

By Michael Hughes December 7, 2009

“He that goes a-borrowing, goes a-sorrowing.” –Benjamin Franklin

Why it’s important: A new federal credit card goes into effect February 22, 2010.  The new law will tilt the playing field toward consumers by removing some of the credit card industry’s most profitable and punishing practices. Consumer advocates favor it. Of course Credit Card issuers warn it will drive up the price of and limit the availability of credit cards at a time when the country needs more spending to stimulate the economy.  Bologna!  Credit card companies.  You remember them right?  They are tied to the largest banks in the country.  Remember the ones who got the “bail outs” and are now experiencing soaring profits and overly zealous bonuses.  Don’t get me wrong.  There is nothing wrong with profit.  I just want the money back that the banks, insurance companies and automakers, borrowed during the bail out.  BOA recently said it would pay back $45B of bailout money, putting pressure on other banks to step up. While some banks have paid back their money (~$4B) most banks, insurance companies and automakers have not.   Play fair,   with Credit Cards,  pay “US” back what you owe us and I will consider that a good start.  In the meantime, expect those little notices to trickle down to consumers in the mail, with increasing interest rates.  As much as 28 percent and more.  One way to overcome this is to pay down your credit cards and keep them paid off every month if possible. If you don’t have the money, don’t spend it. Simple!

In the future interest rate hikes will be limited, such as when a promo rate ends or if a late payment is made.  No more Universal Default-in other words no more raising interest rates when cc companies see payment records from utility companies and other unrelated creditors.  No more random changes in due dates without notice, increasing the likelihood of late fees.  Highest interest rate balances paid first.  It has been the opposite up until now.  Limits on overlimit fees.   No more double-cycling billing.  Therefore if you pay off your credit card every month the credit card company can not go back to a previous billing cycle to charge you interest.  Upfront fees for people with bad credit cannot exceed 25 percent. Also credit card issuers are instituting a new rule on points, cash back and frequent flyer miles.  If you  don’t  pay your card off every month you can pretty much kiss those goodbye. And last but not least credit card issuers must disclose to cardholders the consequences of making only minimum payments each month.  Namely that it will take you well beyond  a Millenium and the Mayan Calendar to pay this balance off if you just make minimum payments.  Keep debt minimal especially when applying for a mortgage. The additional debt can add up and cause problems for the underwriter of the mortgage. Call me with questions.

Contact me today if you or anyone you know in Boulder or the surrounding area needs real estate help or for just a quick question
e-Mail michael.hughes@sothebysrealty.com Direct 303-359-6627 Website: www.bolderrealestate.com

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Filed under credit cards, Fuller Sothebys International Realty, lower living costs, real estate, Tax Credit