Is it time to purchase your first home?  Owning your own home may offer many advantages including building equity, qualifying for tax deductions, and having a place to call your own. It also requires a level of financial and emotional readiness.  Evaluating your position in each of the following categories can help guide you as you make this important decision.

Monthly Finances

Purchasing a home is a big financial decision. In addition to making mortgage payments you also have to factor in additional costs such as taxes, homeowner’s insurance, homeowner’s association fees, city assessments, and household repairs. Mortgage companies use a debt to income ratio (DTI) to determine loan eligibility.

The debt to income ratio involves taking your total monthly debt payments and dividing it by your gross monthly income. In most cases, 43% is the maximum DTI you can get approved for a qualified mortgage. However, many financial experts agree that the recommended number should actually be closer to 36%. This gives you added room for fluctuating income levels and unexpected household or life expenses. Paying off credit card debts, auto loans, and student loans can decrease your DTI and bring it to a more comfortable number.

Immediate Payments

In addition to considering the monthly mortgage and maintenance costs, is also important to consider the immediate costs of purchasing a house. In order to close on the sale of a house, you will have to pay additional fees like inspection, down payment, and closing costs. You also have to factor in moving costs and any needed repairs before moving in.

Credit Score

Credit score is just one of the factors considered when applying for a mortgage. While an approval will allow you to take out a mortgage, it does not necessarily mean that you are ready to purchase. Lower credit scores can qualify for lending, but at much higher of interest rates. Higher interest rates can significantly increase your monthly payment. Improving your credit score can help prepare you for purchasing a home at a monthly payment that you are comfortable with.

Ability to Complete Maintenance

Homes require preventative maintenance and regular upkeep. Some of these preventative tasks can be completed on a DIY basis,while others are best left to a professional. Either way, it is important to know how to handle a housing emergency. Do you know how to handle a leaking pipe? Do you have the available resources to quickly fix a household problem? Responsibilities of homeowners differ from the maintenance responsibilities of renters. Having a savings and emergency fund in place for home maintenance is a proactive move. Your real estate agent can often help connect you with professionals in your area to help keep your home at its best.

The Commitment

Purchasing a home is a longer term commitment compared to renting. The home is financially and legally tied to you, and while this can bring incredible benefits, new responsibilities also come with the decision to buy a home. If you decide to later sell your home, your real estate agent can help you list your home and evaluate purchase offers. It’s important to consider that the real estate market fluctuates and market conditions will impact your home’s re-sale price in the future.

Canadian residents also have different ownership choices, which might be more suited to fit specific commitment needs. While freeholds are the most common type of buying choice, leaseholds allow buyers to lease the land the house sits on. Mortgage co-operatives are also another option that allows buyers to purchase a share within the building.

Some professionals suggest not purchasing a home unless you plan on staying for a minimum of five years. Additionally, having a secure job that you are committed to is also a factor. You establish the size, cost, and type of the house you purchase based on your current income. If you are changing careers frequently or your job is not reliable enough, this can make it difficult to plan for homeownership.

Choosing the Right Home

If you have evaluated your readiness to buy a home and have decided that you are ready to move forward, it important to choose the right home in the right price range. Choosing a house within your budget will allow you to make payments comfortably without neglecting other important parts of your life. Many homebuyers prioritize homeownership over other expensive purchases like cars and vacations.  But stretching your housing budget too far could lead you to resenting your purchase.  Your real estate and mortgage professionals can help equip you with information and resources to make an empowered choice.

Purchasing your first home can be a rewarding and thrilling experience. Jumping into home ownership before you are ready can have adverse effects to your finances, credit score, and life goals. It is necessary to evaluate each of the components involved in purchasing a home and ensure that you are ready to take on the responsibilities along with the rewards of buying your own home.

So you’ve made an offer on your dream home, and the seller has accepted…what are the next steps?

Several things still need to happen before the deal can close, and the house can officially become your home.

The closing process (also called the escrow process) generally takes 30-60 days to complete. Much of the work is done behind the scenes by the team of real estate professionals handling your transaction. But you’ll also be involved in several of the upcoming steps.

Here’s an outline of what buyers can expect during the closing process.

Appraisal and Inspections

The home appraisal is a formal valuation of the property. It is done more for the mortgage lender than anyone else. The lender needs to know that the house is worth the price the buyer is paying. The home is the collateral for the loan; if the buyer defaults, the lender can take possession of the property. So the lender wants to make sure the property is worth enough money for them to give the buyer the loan.

Then there are the inspections. Generally, all buyers should at least have a general home inspection conducted to bring any visible issues to their attention. Additional inspections (requiring specialized professionals for items like chimneys, drainage pipes, and roofs) may also be a good idea.

The goal of the inspections is simply to make sure buyers are aware of the actual condition of the property before closing the deal. If you find something unacceptable during the inspections, you have the option to 1) ask the seller to make repairs, 2) ask the seller for a price reduction or closing credit, or 3) walk away from the deal.

Securing Financing

Savvy buyers know to get pre-approved for a loan even before the home search begins. That way you can be reasonably sure you won’t have trouble securing financing when you find the right home.

Once you have an accepted offer, you’ll need to provide your most recent financials to your lender (bank statements, tax returns, pay stubs, etc).

From this point until the deal is closed, don’t do anything to change your financial situation. Don’t change jobs, don’t buy a car, don’t even pay down a large amount of debt or accept a raise. Anything that changes your finances would require the lender to start your approval all over from scratch. Save any financial changes for after the closing date.

Signing the Paperwork

There will be a lot of paperwork to be signed and notarized. Request a copy of all the documents before your signing appointment so you can read through it at your leisure, and be ready to just flip and sign when you’re sitting with the notary.

The Final Walk Through

Immediately before closing, you’ll have a chance to walk through the property one more time. This allows you to make sure the property is still in the condition it was in when you made your offer and that any repairs requested following the inspections were completed.

Paying Your Closing Costs and Getting Your Keys

With everything in order, you can wire your closing costs (the down payment, prorated taxes and insurance, and transaction fees) to your escrow company. This typically happens a day or two before the official closing date so funds can be received on time.

On closing day, you can get your keys, and let yourself into your new house.

Welcome home!

New year, new look for your home! We’re looking at the most innovative home design trends for 2019 in order to show how simple it can be to incorporate them into your own space. Here are some of our favorite interior design trends and how you can breathe new life into your current spaces.

Bold and patterned back-splashes

While 2018 was a minimalist year for interior design, 2019 will signify a move toward more vibrant kitchen looks. Bold and patterned back-splashes can add some life back into your kitchen with bright colors and graphic tiles. Try using a cool blue, gray or even geometric-patterned tile in your kitchen.

Sustainable and natural elements

Furniture and decor pieces made from materials like jute, rice paper, reclaimed wood, and recycled granite, and clay are wonderful items to include in your space, as they are made responsibly, with nature in mind. Incorporating plants into your home design will also add a fresh and serene ambiance to your space.

Velvet furnishings

Velvet is soft, cozy, and luxurious with a fresh and funky twist. Velvet sofas in particular have become trendy among furniture designers and will continue to be a hit in 2019. Adding velvet furniture in jewel-toned designs is a great way to incorporate the trend into your space without giving your home an overly retro feel.

Richer color palettes

Jewel tones and dark, warm color palettes are trendy for 2019. Incorporate rich textures and colors into your home to bring your minimalist furnishings into the new year with a twist on simple tradition.

Mixing and matching furniture, metals

Another way to take give your current home design a fresh look for 2019 is by mixing and matching furniture and metals. Rather than keeping uniform furniture sets in the same room, mix it up a bit. Try styling your spaces in different ways, incorporating various furniture styles together to give your home a fresh and cozy look. Additionally, mixing metals is another way to modernize your space for the new year. Try incorporating silver, gold, and copper together, and feel free to mix up your home design without the pressure for everything to match.

Geometric and tribal patterns

Over-sized, bold geometric patterns and tribal styles are big trends for this new year in home design. Be expressive in your home design by incorporating patterns that you love that breathe life into your space. If you don’t want to purchase trendy new furniture items to achieve this look, you can offset the minimalist look of your home by adding patterned textiles and decor elements to your home.

Convertible dwellings

If you live in a small home or an urban area, convertible dwellings will be a big trend to incorporate in your home design in the new year. Murphy beds, expandable tables, and multi-functional furnishings are practical and intriguing elements to include in your home design, as they are equally useful and interesting to guests.

Designed ceilings

Gone are the days of a plain ceiling. Now, your home design can go beyond tired accent walls and throw pillows and move toward an innovative ceiling design. Add an inspirational tone to your home with a fresh take on the accent wall by creating a statement ceiling, either with a patterned wallpaper or a splash of color, paying homage to the ornately designed ceilings of the 1920’s.

You don’t have to move to create a fresh look for the new year! Find a trend that works for you and make it work in a space you’re already comfortable in.

The real estate world is full of myths. Myths that prevent people from making smart decisions when buying and selling and keep people from maximizing their real estate returns.

Let’s count down the top five biggest real estate myths. And debunk each one!

Myth #5. You shouldn’t buy right now because interest rates are rising.

Rising interest rates are a great reason to buy right now!

Historically speaking, interest rates are still exceptionally low. Throughout the 70s, interest rates ranged between seven and 12 percent. The 80s saw double-digits, reaching over 18 percent at one point. The 90s were more in the seven to nine percent range.

Today, you can still get a mortgage loan under five percent with good credit. If you plan to buy, do it now before rates rise!

Myth #4. You need a 20% down payment to buy a house.

This myth is a relic of previous generations, when you really did need a 20 percent down payment to get a mortgage and buy a house. That was when homes prices were $100,000, so 20 percent down was a large but manageable $20,000. Now that home prices in some major metro areas top $400,000, lenders have come up with different financing arrangements for all of us who couldn’t possibly come up with an $80,000 down payment.

One of the most popular options for low down payments is an FHA (Federal Housing Administration) loan. Not only do FHA loans provide a route to home ownership with as little as 3.5 percent down (just $14,000 on a $400,000 home), but they can also work with less-than-stellar credit.

Don’t dismiss buying a home because of the down payment, talk to a lender and explore your options.

Myth #3. Real estate investing is just for the rich.

It’s easy to see where this myth comes from: real estate typically requires a substantial investment, so people assume it’s only for investors who have money to spare.

But there are so many ways for the 99 percent to start investing in real estate! Instead of buying a single-family home, buy a duplex or triplex. You can live in one unit while you make money renting out the other units. You can also take advantage of low down payment programs or find investment partners and pool your money to purchase your first investment property.

Myth #2. You need to leave yourself room to negotiate when deciding on a list price or offer.

Sophisticated buyers and sellers don’t have time for games.

If you over-price your house to “leave room to negotiate”, buyers will assume you’re unreasonable and will steer clear. And sellers will dismiss low-ball offers from buyers just as easily.

If you’re serious about buying or selling, stick with real, reasonable numbers from the very beginning.

Myth #1. Going for sale-by-owner will save you money.

It’s tempting to cut real estate agents out of a real estate transaction to avoid paying the commission. But it can actually cost you money.

First, your home will sell for less. You don’t have the connections or marketing reach of a real estate professional and buyers who only look at for sale-by-owner are typically looking for a steal, so they offer less.

Second, you’ll spend your own time and energy on the transaction, and your home will sit on the market longer. Time is money!

Third, what if something goes wrong? Are you prepared to navigate the unusual legal and financial issues real estate agents deal with routinely? A single missed clause in the contract could potentially cost you thousands.

Don’t fall for this myth. To protect your financial interests, hire a professional to represent you in your real estate transactions.

Smart homes are the next big thing. You may not realize it yet, but somewhere your day will be easier because of it. Smart home technology is not only impacting the homes its installed into. Its reach stretches to other industries like business, science and even health care.

Disruptive Growth

The rapid rate of growth in the smart home industry has an effect on all kinds of industries. The easiest way to track this is to follow the money. In 2018 alone, the US has spent $19.8 billion on smart home technology. This may seem like a low amount compared to the total size of the American Gross Domestic Product. But, keep in mind that smart homes are all about connecting different types of technology. It uses the Internet of Things (IoT) to do this. It’s estimated that by 2020 IoT will generate revenue exceeding $300 billion. The influential power of that $19 million (spent in 2018) suddenly looks very promising

Home Automation

Smart homes have you in mind. Its very existence is to make your life easier and cheaper. Different products will have differing applications. You can be sure that any room in your house can be automated in some way through this technology.

Smart Kitchens

Smart ovens, smart refrigerators, smart microwaves and the list goes on. You are now able to monitor and control certain functions in your kitchen from your smartphone. You aren’t alone in the kitchen anymore. Smart kitchens have your back!

Smart Climate Control

You can program your thermostat and air conditioning from an app. Schedule and control these devices through a wireless connection via the internet. Be your own weatherman and decide the climate of your house. Or save unnecessary costs by stopping these units from consuming gas and electricity beyond your budget.

Smart Security

Be the king of your castle as you track monitor and control vulnerable aspects of your home. Use home security systems like smart CCTV, smart locks, smart sensors and alarms to enjoy absolute control over what is yours. Sixty two percent of Americans claim smart security as the top benefit of owning smart homes. Three out of every five Americans who own smart homes will use a smartphone to monitor their houses. Total control is now possible on the go.

Taking the nation at large!

The world is becoming a smaller place, and smarter too. Smart homes have bridged many gaps to make life easier for its owners. America is leading the global charge with 7.5 percent of homes already adopting the technology. In 2022 that number is expected to hit 19.5 percent. Life as you know it is changing every day due to smart homes. Click here to see an infographic detailing the history and changes caused by smart homes.