Things to Avoid After Applying for a Mortgage

Things to Avoid After Applying for a Mortgage

Things to Avoid After Applying for a Mortgage | MyKCM

Congratulations! You’ve found a home to buy and have applied for a mortgage! You’re undoubtedly excited about the opportunity to decorate your new home, but before you make any large purchases, move your money around, or make any big-time life changes, consult your loan officer – someone who will be able to tell you how your decisions will impact your home loan.

Below is a list of Things You Shouldn’t Do After Applying for a Mortgage. Some may seem obvious, but some may not.

1. Don’t Change Jobs or the Way You Are Paid at Your Job. Your loan officer must be able to track the source and amount of your annual income. If possible, you’ll want to avoid changing from salary to commission or becoming self-employed during this time as well.

2. Don’t Deposit Cash into Your Bank Accounts. Lenders need to source your money, and cash is not really traceable. Before you deposit any amount of cash into your accounts, discuss the proper way to document your transactions with your loan officer.

3. Don’t Make Any Large Purchases Like a New Car or Furniture for Your New Home. New debt comes with it, including new monthly obligations. New obligations create new qualifications. People with new debt have higher debt to income ratios…higher ratios make for riskier loans…and sometimes qualified borrowers no longer qualify.

4. Don’t Co-Sign Other Loans for Anyone. When you co-sign, you are obligated. As we mentioned, with that obligation comes higher ratios as well. Even if you swear you will not be the one making the payments, your lender will have to count the payments against you.

5. Don’t Change Bank Accounts. Remember, lenders need to source and track assets. That task is significantly easier when there is consistency among your accounts. Before you even transfer any money, talk to your loan officer.

6. Don’t Apply for New Credit. It doesn’t matter whether it’s a new credit card or a new car. When you have your credit report run by organizations in multiple financial channels (mortgage, credit card, auto, etc.), your FICO® score will be affected. Lower credit scores can determine your interest rate and maybe even your eligibility for approval.

7. Don’t Close Any Credit Accounts. Many clients erroneously believe that having less available credit makes them less risky and more likely to be approved. Wrong. A major component of your score is your length and depth of credit history (as opposed to just your payment history) and your total usage of credit as a percentage of available credit. Closing accounts has a negative impact on both of those determinants in your score.

Bottom Line

Any blip in income, assets, or credit should be reviewed and executed in a way that ensures your home loan can still be approved. The best advice is to fully disclose and discuss your plans with your loan officer before you do anything financial in nature. They are there to guide you through the process.

One of the Top Reasons to Own a Home

One of the Top Reasons to Own a Home

One of the Top Reasons to Own a Home | MyKCM

One of the benefits of homeownership is that it is a “forced savings plan.” Here’s how it works: You make a mortgage payment each month. Part of that payment is applied to the principal balance of your mortgage. Each month you owe less on the home. The difference between the value of the home and what you owe is called equity.

If your home has appreciated since the time you purchased it, that increase in value also raises your equity. Over time, the equity in your home could be substantial. Recently, CoreLogic revealed that the average homeowner gained more than $65,000 in equity over the last 5 years.

Unlike last decade, homeowners are no longer foolishly tapping into that equity. In 2006-2008, many owners used their homes like an ATM by pulling equity out to purchase new cars, jet skis, or lavish vacations. They were pulling out cash (equity) from an appreciating asset, and then spending it on rapidly depreciating items. That is not happening anymore.

Over 50% of Homes Have at Least 50% Equity

The number of homeowners that currently have at least 50% equity in their home is astonishing. According to the Urban Institute, 37.1% of all homes in the country are mortgage-free. In a home equity studyATTOM Data Solutions revealed that of the 62.9% of homes with a mortgage, 25.6% have at least 50% equity. That number has been increasing over the last five years:One of the Top Reasons to Own a Home | MyKCMBy doing a little math, we can see that 53.2% of all homes in this country have at least 50% equity right now. Of all homes, 37.1% are mortgage-free and an additional 16.1% with a mortgage have at least 50% equity.

Bottom Line

Homeownership is different than renting. When you own, your housing expense (the mortgage payment) comes back to you in the form of equity in your home. That doesn’t happen with your rent payment. Your rent helps build your landlord’s equity instead.

A Recession Does Not Equal a Housing Crisis [INFOGRAPHIC]

A Recession Does Not Equal a Housing Crisis [INFOGRAPHIC]

A Recession Does Not Equal a Housing Crisis [INFOGRAPHIC] | MyKCM

Some Highlights:

  • There is plenty of talk in the media about a pending economic slowdown.
  • The good news is, home values actually increased in 3 of the last 5 U.S. recessions, and decreased by less than 2% in the 4th.
  • Many experts predict a potential recession is on the horizon. However, housing will not be the trigger, and home values will still continue to appreciate. It will not be a repeat of the crash in the 2008 housing market.

6 Home Repairs You’ll Regret Trying to Do Yourself

6 Home Repairs You’ll Regret Trying to Do Yourself     by Brittany Fisher

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There’s something satisfying about fixing up a home yourself. Sure, it’s great to save a few dollars, but the real fun is in learning new skills and becoming more self-sufficient. However, no matter how much you enjoy a good DIY challenge, there are some projects you simply shouldn’t do yourself, including the ones listed below.

Tree Removal

Why DIY is a bad idea: Felling a tree or trimming large limbs yourself may save money over hiring a tree service, but it could cost far more if the tree falls on a house, car, power line, or person. There’s also the danger of trying to wrangle a chainsaw while on a ladder.

 

How to hire a pro: Davey Tree recommends only removing trees yourself if they’re small enough that you don’t need a ladder. Otherwise, contact a local tree service. They’ll assess the tree’s size and position before providing a quote.

Roof Repairs

Why DIY is a bad idea: Besides the risk of falling off your roof, roof repairs done incorrectly could let water leaks continue undetected until a much larger problem develops. It’s normal to want to save on this expensive job, which can cost anywhere from $4,900 to $14,100 for a full roof replacement, but hiring a roofing company is worth the money.

 

How to hire a pro: Rather than trying to save money with a DIY project, get multiple quotes to find the best deal. Roofing costs depend on a variety of factors, but you may be able to find a roofing company that charges less for complicating factors like a steep roof or skylights.

Gas Appliance Installation

Why DIY is a bad idea: Gas appliances have to be installed just right to prevent a gas leak, and a small mistake could lead to a fatal outcome.

 

How to hire a pro: Buying appliances from a retailer that offers delivery and installation is the easiest way to ensure your gas dryer, stove, furnace, or water heater is installed correctly. If that’s not an option, hire a plumber certified to work with gas lines to handle gas appliance repairs and replacements.

Asbestos Removal

Why DIY is a bad idea: Removing asbestos isn’t technically difficult, but it does pose a risk to your health. When inhaled, asbestos fibers damage the lungs and airways, and contribute to chronic health problems like mesothelioma.

 

How to hire a pro: If you think you’ve spotted asbestos while remodeling, stop your project and buy an asbestos test kit. If the results come back positive, contact an asbestos abatement specialist to remove the asbestos safely before continuing.

Garage Door Repairs

Why DIY is a bad idea: Garage door springs don’t look like much, but they hold a lot of tension. A mistake while removing or installing a garage door spring could damage the opener or, worse, cause a severe injury.

 

How to hire a pro: At an average cost of $200 to $300, replacing garage door springs is an inexpensive repair. Contact a local garage door company with details about the size and model of your garage door to get a quote.

Lead-Based Paint Removal

Why DIY is a bad idea: Can’t wait to repaint your vintage house? Before you start, check when it was built. If it’s before 1978, there’s a good chance it was painted with lead-based paint, which is linked to learning disabilities and behavioral problems in children, as well as headaches, nausea, and other symptoms in adults.

 

How to hire a pro: First, hire a certified lead inspector to test for lead-based paints. There are home test kits, but they only test the top layer and won’t detect lead that’s been painted over. If lead is present, you’ll have to hire a professional certified in lead abatement.

 

No amount of money saved is worth risking your health and safety or major damage to your home. The next time you get an itch for a DIY project, stick to the safe projects and let professionals handle these six repairs. Even when your budget is tight, a professional repair that keeps your home and family safe is money well spent.

 

Image via Unsplash

Open House Sunday April 28 1pm to 4pm. H

Open House Sunday April 28 1pm to 4pm. House is ready to move in by summer in time for school.
(link: https://www.flexmls.com/share/2HKJ5/3.01SavannahCtMarlboroNJ07746) flexmls.com/share/2HKJ5/3.…

Bonfires on the beach, a beloved summer-

Bonfires on the beach, a beloved summer-long happening in Asbury Park, are open to all and will be held weekly
September, Fridays at 7pm

September 6 – Beach Bar, 5th Avenue

September 13 – The Anchor’s Bend, Sunset

September 14 – The Anchor’s Bend, Sunset (additional Bonfire)

September 20 – Langosta Lounge, 3rd Avenue

September 27 – MOGO, 1st Avenue

Home ownership Will Always Be a Part of the American Dream

Home ownership Will Always Be a Part of the American Dream

Homeownership Will Always Be a Part of the American Dream | MyKCM

On Labor Day we celebrate the hard work that helps us achieve the American Dream.

Growing up, many of us thought about our future lives with great ambition. We drew pictures of what jobs we wanted to have and where we would live as a representation of a secure life for ourselves and our families. Today we celebrate the workers that make this country a place where those dreams can become a reality.

According to Wikipedia,

Labor Day honors the American labor movement and the contributions that workers have made to the development, growth, endurance, strength, security, prosperity, productivity, laws, sustainability, persistence, structure, and well-being of the country.”

The hard work that happens every day across this country allows so many to achieve the American Dream. The 2019 Aspiring Home Buyers Profile by the National Association of Realtors (NAR) says,

“Approximately 75% of non-homeowners believe homeownership is part of their American Dream, while 9 in 10 current homeowners said the same.”

Looking at the number of non-owners, you may wonder, ‘If they believe in homeownership, why haven’t they bought a home yet?’. Well, increasing home prices and low inventory can be part of the reason why some haven’t jumped in, but that does not mean there is a lack of interest. The same report shows the increase in the desire to buy in the last year (as shown in the graph below):Homeownership Will Always Be a Part of the American Dream | MyKCMAs we can see, there are more and more people each quarter who want to buy a home. The good news is, as more inventory comes to the market, more non-homeowners will be able to fulfill their dreams. Finally, they’ll be able to move into that home they drew when they were little kids!

Bottom Line

If you’re a homeowner considering selling, this fall might be the right time, as there are buyers in the market ready to buy. Let’s get together to determine how you can benefit from the pent-up housing demand.

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