The Key Steps of a Mortgage Pre-Approval


If you’re buying a home with a mortgage, you absolutely need to get a pre-approval first. Here’s why.


 There's no doubt about it. It's a very competitive market today if you are looking to buy a home.

 Inventory is near record lows, and more and more homebuyers are entering the market. This means you need every advantage to grab that perfect home when you do find it.

 One no-brainer is to get pre-approved for a mortgage. A pre-approval informs you of how much you can borrow and it's something you will need to do at a later point anyway.

 A pre-approval can mean the difference between having your offer accepted or having to watch your dream home go to somebody else in a crazy market like this.

 In spite of all these good reasons, less than 10% of buyers who got a mortgage get pre-approved by the lender who originated the loan. In other words, you can definitely get a leg up on the competition by starting your home search at the loan office rather than at the open house. 
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A pre-approval definitely gives you a leg up on the competition.

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Here are a few things that you will need:

 1. Proof of income. At a minimum, lenders will want to see pay stubs from the past 30 days showing your year-to-date income, two years of federal tax returns, and two years of W2 forms from your employer.

 2. Proof of assets. You will need to present statements from your checking, savings, or investment accounts to prove that you have funds for the down payment and closing costs.

 3. Good credit. Most lenders reserve the best rates for homebuyers with a credit score of 740 or above. You can still qualify for a mortgage with a lower credit score, but a good lender will also recommend ways that you can improve your credit and qualify for a better loan. 

 These are the biggest and most common things you will need to get pre-approved, though your lender might want to see some other documents as well. 

 Once you are pre-approved, the buying process will be faster, more convenient, and less stressful. Most importantly, it will make it more likely that your offer for that perfect home gets accepted. 

 If you have any questions for me or need any additional assistance, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.

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Location: Saco, ME, USA

Interest Rates Will Be Rising Soon



Interest rates are creeping up. Here’s how people are taking advantage of the market now.

We're in for a very competitive stretch in the real estate market.

First off, mortgage rates have started increasing. For the first time since last summer, the 30-year average mortgage rate is now over 4%. This follows a long period when mortgage rates were near record lows.

This latest increase might be more than just a temporary bump. Some experts predict that we've seen the last of sub-4% mortgage rates, thanks to strengthening inflation and broad-based economic growth.

Second, mortgage applications are also increasing. Applications were up in January by 4.1% compared to last year. This has been led by people looking to refinance their homes, while mortgage applications by homebuyers remained at steadier levels.

Third, housing supply continues to be increasingly tight, with 10% fewer homes on the market than a year ago.

What do all of these numbers mean for you?

Homebuyers are looking to lock in the current, low rates.

The growth in mortgage rates shouldn't affect the number of eager homebuyers very much because there is so much more demand than supply right now. However, this rise in mortgage rates might actually reduce the number of homes for sale even further.

Homebuyers should be looking to lock in the current, still fairly low mortgage rates. When mortgage rates increase further, homeowners will have less of an incentive to sell their current home and buy a new home, which will require a mortgage at a new, higher rate.

If you have any questions about where the current rates are at or you have any real estate needs we can assist with, please don’t hesitate to reach out and give me a call or send me an email. I look forward to hearing from you soon.

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Location: Saco, ME, USA

3 Tips for Southern Maine Home Sellers



What can you do to set your home apart from the competition? I have three tips to give your listing a competitive edge.

Selling a home? Click here for a FREE Home Price Evaluation

What can you do to give your home a competitive edge once it hits the market?

1. Get your home pre-inspected. By ordering the inspection, you show the buyer that you’ve done some due diligence. It also shows that you addressed any issues head-on.

Another benefit of the pre-inspection is that you will save more money in the long run. When the buyer does the inspection, they are trying to find everything they need to know about the property while looking for a way to renegotiate with you on pricing and repairs.

Depending on what comes up during the home inspection, buyers can get very nervous. Their idea of what something might cost to repair can be a little skewed. If you’ve done the inspection and addressed those issues head-on—and you have the report and receipts to show it—you will save money in the long run. You also won’t be blindsided by any surprises.


Staged homes sell in 11 days and for 17% more money than non-staged homes.
2. Have your home staged. According to the National Association of Realtors, homes that are professionally staged sell in 11 days or less and for 17% more than non-staged homes. Staging will yield you more money in a shorter amount of time. Staging also helps buyers see where things can be placed in the home to make it warm and welcoming.

3. Have professional photos taken. We always use a professional photographer on all of our listings. Everyone knows that a picture says 1,000 words, but I think a picture says a million words. People get emotional when it comes to buying, and those photos are their first impression of your home.

If you follow these tips, you will set your listing up for a successful sale. If you have any other questions about selling in today’s market, just give me a call or send me an email. I would be happy to help you!
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Location: Saco, ME, USA

Tax Reform’s Effect on the Real Estate Market



I’m sure you’ve heard a lot about tax reform lately. Here’s a few ways The Tax Cuts and Jobs Act will affect the real estate market.

 Buying a home? Click here to perform a full home search

There's a lot of uncertainty about The Tax Cuts and Jobs Act and its effect on real estate. Let’s first take a look at the four key tax changes impacting the housing market at this moment:

1. Deductions for property taxes. Prior to the new tax bill, if you itemized your deductions, you could deduct all of your property tax. Going forward, this amount will be capped at $10,000.

2. Deductions for mortgage interest. The final bill reduces the limit on deductible mortgage debt to $750,000 for new loans taken out after 12/14/2017. Other loans of up to $1 million are grandfathered in.

3. Home sales exclusion for capital gains. If you sell your home and turn a profit, then up to $500,000 of that profit is exempt from capital gains tax. Although earlier versions of the bill required you to live in the home for five out of the last eight years, the final bill made no changes to the capital gains exclusion. In order to qualify for this exclusion, you must have lived in your home for two of the past five years to claim this exemption—just like before. 

4. Deductions for moving expenses. The final bill repealed the moving expense deduction, except for those who are members of the Armed Forces. 

The first two changes increase taxes on current homeowners and make homeownership less attractive. This is a part of why the National Association of Realtors claims that home prices could drop by more than 10% due to the new tax plan.

On the other hand, the last change makes it more expensive to sell your home. As a consequence, they could keep some homes off the market.


These reforms may drive home prices down in the midterm.


We'll have to see how the different changes play out in reality, and how they interact with other real estate conditions. However, there does seem to be a consensus among experts that current reforms might drive home prices down somewhat in the midterm.

On the bright side, home sellers do still get to take advantage of the home sales exclusion for capital gains. That is a major victory for real estate.

That's why if you've been thinking of selling your home, now might be a good moment to start the process. If you have any questions, whether you are buying or selling, you can always call me or shoot me an email. I can give you more specific recommendations based on your unique situation. I look forward to hearing from you soon.
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Location: Saco, ME, USA

Homebuyers Are Feeling Optimistic



Why are homebuyers more optimistic than they have been in the past few years? Here’s what we found.

 Buying a home? Click here to perform a full home search

Here’s a paradox for you: Right now, homebuyer confidence is at an all-time high, according to a survey performed by Fannie Mae. Furthermore, an increasing number of people, particularly renters, think now is a good time to buy a home. Yet at the same time, housing inventory remains very tight. It’s down 6.5% nationally from last year. Home prices are also up 6.9% nationally over last year.

In other words, homebuyers are optimistic at a time that the market seems to be favoring sellers. So, what's going on? Why are homebuyers so optimistic all of a sudden? Here are three possible explanations:

1. Lending is loosening up. Over the past several years, mortgage rates have seen historical lows. This has meant that homes are actually more affordable, in spite of the increase in prices. However, lending has been very tight. Fortunately, that’s changing. Lenders are approving mortgages at the highest rate since 2011, with 77% of mortgages for home purchases approved.


Lenders are approving mortgages at the highest rate since 2011.


2. Jobs are looking good. At the moment, fewer homebuyers are worried about losing their jobs, according to the same Fannie Mae survey. It's not just job security that's contributing to greater optimism about buying a home. Overall income is higher, making homes more affordable by comparison. The median household currently has 150% of the income needed to buy a median home, compared to a historical average of just 125%.

3. Long-time renters are ready to buy. Millennials, the generation of people born after 1980, have largely opted out of homeownership until now. They have been renting for a longer time, putting them higher up on the pay scale compared to previous generations of first-time homebuyers. But now, many millennials are finally hitting an age when they are willing to commit to buying instead of renting. This is reflected in the Fannie Mae report, which states that much of the increase in homebuyer optimism comes from current renters.

What all does this mean for you? If you're looking to buy a home, all of the above reasons should give you confidence that now is indeed the right time to buy.

If you’re thinking about buying or selling a home, click the links above to search for homes on the MLS or find out how much your home is currently worth.

And if you have any questions about the Southern Maine real estate market, whether you're thinking of selling or buying, give me a call at 207-553-2602. I'm here to help. I look forward to hearing from you soon.
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Location: Saco, ME, USA
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