Homepage
View Our Listings
Search MLS Listings
Our Agents
Real Estate Tips
Links & Resources
Contact Us

Lake Landing Realty
PO Box 278
Engelhard, NC  27824
Office: (252) 925-8200
FAX:   (252) 925-2118

Toll FREE:
(866) 380-5253

info@lakelandingrealty.com

Real Estate Tips

Over the years, we at Lake Landing Realty have found that our clients like the idea of being well informed.  Because of this, we have compiled this webpage to help answer some of our more commonly asked questions.  Please click on any of the links below to view the bookmarked information.  When you are done with a section, please click on the "Return to Top" link at the bottom of the article.
 


How Much Can You Afford?

Before you can begin to search for a new home, you need to determine your budget and estimate how much you can afford. One of the most important factors in figuring out your financial budget is getting pre-approved for a mortgage.

First Calculate the Estimated Mortgage Payment

Several formulas exist to help determine how much a lender will allow a consumer to borrow. One of the more accurate formulas is a front- and back-end ratio. It states that the buyer can afford as much as 28 percent of his or her gross-monthly income toward the monthly mortgage payment, assuming that the consumer's other debt payments (credit cards, car loans, student loans, etc...) are less than or equal to 8 percent of his or her gross-monthly income.

To better understand this formula, assume a gross-family income of $5,000 a month. The front-end ratio or maximum monthly mortgage payment is (28 percent of $5,000) $1,400. The back-end ratio is (8 percent of $5,000) $400. Therefore, the buyer can afford a $1,400.00 monthly mortgage payment as long as monthly debt payments are less than or equal to $400. If debt payments exceed the back-end ratio, it will reduce the monthly mortgage payment dollar for dollar. For example, if debt payments are $500, the maximum monthly mortgage payment a person could afford would be reduced to $1,300.

Down Payment and Closing Costs

These terms refer to how much money the buyer will have to pay out of pocket and up-front to purchase a home. Down payment is simple; it refers to the amount of money the buyers needs to invest at closing toward the price of the home. Most lenders request a down payment of at least 20 percent of the cost. For first-time homebuyers, this may be difficult to achieve. Several programs are available and relatively easy to qualify for that allow buyers to make down payments of as little as 3 percent of the price of the home.

Closing costs vary from state-to-state, city-to-city and even from home-to-home. Closing costs can include attorney fees, home inspection costs, title search fees, bank fees, termite inspection fees and radon inspection fees, to name a few. The mortgage lender requires some of these services and others are legally necessary depending on where the buyer lives.  For the sake of estimating, closing costs can range from 1 to 5 percent or more of the value of the home.

- Return to Top -


What is a Mortgage?

The first step towards financing a new home is getting pre-approved for a mortgage. A mortgage is an advance of money from your lender that will cover the finances of your new property. Over an extended period of time, you (the mortgagee) must pay the bank back each month a percentage of the money they lent you plus interest, until the total sum is paid in full. This is how most homes are financed.

- Return to Top -


Documents Needed

When you apply for a mortgage, you will need to furnish information regarding your income, expenses and obligations. To save time, have the following items available for each borrower:

  • Two most recent pay stubs
  • W-2s for the last two years
  • Federal tax returns for the last two years
  • Last two months' bank statements
  • Long-term debt information (credit cards, child support, auto loans, installment debt, etc.)

- Return to Top -


Repairing Credit Problems And Establishing Good Credit

At one time or another, most people have put blemishes on their credit reports. If your credit report is tarnished, here are a few suggestions you can do to repair the damage.

Examine the credit report thoroughly and make sure it's accurate. If there are mistakes on the report, contact the credit report agency and ask them to remove the mistakes immediately. Here are some other helpful tips:

Begin to Pay Your Bills on Time and in Full

  • Only use two to four credit cards so that you can keep track of them and do not spend more than your budget
  • Keep a separate checking and savings account
  • Keep the same job for a few years, the longer you stay put, the better Now that you've examined your credit report and are confident that you're in good shape, you're ready to choose between getting pre-approved for a mortgage or pre-qualified for a mortgage. Here's the difference:

Pre-approval uses basic information as well as electronic credit reporting to determine whether a lender will loan you money. If you are pre-approved for a mortgage, the lender has given you a commitment to support your new purchase.

Pre-qualification is not a mortgage approval but simply an estimate of what you can afford. When you pre-qualify for a mortgage, the lender also collects basic information regarding your income, monthly debts, credit history and assets, and then uses this information to calculate an estimated mortgage amount. The lender has not yet committed to supporting your financial needs and, therefore, you have not received an actual guarantee of funds.

People who are pre-approved for a mortgage are more attractive candidates to the seller and have a better chance of getting the property when they make an offer. Of course, a lender will only lend you money if they're sure your credit is strong and they're confident you have the ability to pay them back. A bank checks your credit by studying your financial history, income, federal tax returns, pay stubs, and long-term debt information (such as credit cards, auto loans, child support, etc.) to determine if you are a good candidate for a loan. If your credit report is good, then you have an excellent chance of obtaining a mortgage. If not, then you must take the appropriate steps to improve your credit rating.

Getting Approved Deciding

Of course, a lender will only lend you money if they're sure your credit is strong and they're confident you have the ability to pay them back. A bank checks your credit by studying your financial history, income, federal tax returns, pay stubs, and long-term debt information (such as credit cards, auto loans, child support, etc.) to determine if you are a good candidate for a loan. If your credit report is good, then you have an excellent chance of obtaining a mortgage. If not, then you must take the appropriate steps to improve your credit rating.

- Return to Top -


How to Make an Offer... and be Successful

When the demand for houses in a sizzling marketplace outweighs the supply of houses available, many consumers think the highest offer is a sure-fire way to claim ownership of their dream home. In today's fast-paced market you should know that bidding for a house doesn't always require upping the stakes.

Accommodate the Seller's Needs

As a buyer, you have to be flexible and willing to sacrifice a bit. Whether it's being willing to close one month earlier or later, do your best to meet the seller's desired closing time. Additionally, be willing to overlook the more minor and but less-than-perfect characteristics of a given home because other prospective buyers may not be able or willing to do so.

Be Prepared

If you are willing to make the investment, then you must be a qualified, solid, desirable buyer. Get a copy of your credit report and settle any debts that may be outstanding.  Get pre-approved for loans and mortgages. If you go into the negotiation process as a pre-approved buyer, it will put you at a major advantage.

Make a Connection with the Seller

Create a rapport with the seller and let them know why you prefer their house to others. Homeowners tend to be emotionally attached to their home. Even when selling their home, they often feel tied to the integrity of the house. Because the seller loves the house, they are usually inclined to sell it to someone who will love it too.

Eliminate What Ifs

Eliminating as many contingencies as possible will give you an advantage when involved in a bidding war. If you have a home to sell before purchasing, sell it first. Reducing uncertainty makes the buyer more appealing to the seller and will create leverage for the buyer.

Show the Seller That You Have the Money

Be willing to increase the size of your down payment or make an all cash offer. Sometimes the best way to win a bidding war and avoid paying a higher price is to increase your down payment. Sellers favor strong buyers. If you can afford to make an all cash offer, do so. That's almost always a definite way to close a sale.

- Return to Top -


How to Increase the Value of Your Home

A home is arguably one of the largest financial investments a person will make in their lifetime. While property values over time are determined by national variables, the economy and local market conditions, the care and upkeep of a property is also a crucial element toward achieving a solid re-sell. Whether you are planning on adding more rooms to create extra space, upgrading your kitchen with new appliances or are thinking of putting your home on the market, here are some essential home improvement tips that might increase the value of your home.

Remodel the Kitchen:

Out of all the rooms in the house, the kitchen is the most popular to remodel. According to Remodeling Magazine, money spent to upgrade a kitchen produces the highest return on investment. "Hot" kitchen makeover trends include adding dual sinks, cooking stations, extra-long dishwashers, under-cabinet lighting, warming ovens and wine coolers.

Upgrade the Bathroom:

Upgrading a bathroom is also a sound choice and will usually provide a significant return on investment. Large bathrooms are typically on the top of the list of priorities for those seeking to purchase a home. Adding skylights, glass block windows, ceiling fans and sunken whirlpool baths are also attractive selling features. If you don't have the room to expand or to accommodate larger appliances, or you don't think you'll be living in your home long enough to enjoy the changes and/or see a return on this kind of investment, stick with neutral, mid-builder level updated cabinetry, refreshed flooring and shower/tub, or a new sink and toilet.

Create New Space:

Adding a room or two, such as a spare bedroom or a study, is a significant home improvement that you will be able to take advantage of every day. In addition to the much-needed extra space, it can also potentially provide you with a good return on your investment when it comes to selling the property.

Landscape for Curb Appeal:

A professionally landscaped yard can certainly increase the "curb appeal" or desirability of a home. In fact, beautifying your lawn can be one of the most inexpensive home improvements. Additional simple landscaping projects include trimming and edging the grass, manicuring the trees and shrubs to open up the view of the house, removing any dead plants and planting flowers to brighten up the yard.

Make Necessary Repairs... Prioritize:

While many homeowners may want to update and remodel their kitchen, if the roof needs fixing or the chimney has to be reappointed, then they should prioritize these necessary repairs over any cosmetic changes. This applies to both sellers and those who plan to stay in the home for years to come, as these essential repairs must be taken care of before they cause the house to lose value. It is vital to look after the minor problems such as a leaky faucet or a loose cabinet to ensure that your house doesn't undergo any long-term damage. As soon as you notice a problem, fix it since this will help avoid a larger expense later on.

Spic & Span... Cleanliness Sells:

A paint job, new double-paned windows and new carpeting will increase the price of a house virtually dollar-for-dollar. Neutral colored paint and eliminating clutter can make a world of difference. However, don't go overboard with home improvement projects that will push a house too much above the current average value of homes in your neighborhood. It is important to make sure that your home has standards that are in-line with the other houses in the neighborhood, but you do not want to price yourself out of the market.

Exterior

  • Keep grass mowed
  • Shrubs trimmed
  • Pick up lawn tools, toys
  • Sweep front walkway
  • Clean up after pets

Interior

  • Pick up toys and shoes
  • Make beds
  • Put clothes away
  • Prepare tables with flowers and place settings
  • Set out a game or “coffee table” book
  • Turn off the television
  • Play soft background music
  • Tidy up bathrooms; set out show towels
  • Open drapes and shades
  • Turn on lights
  • Make house look bright and cheerful
  • Do a quick dusting and give the carpets a once-over with the vacuum
  • Straighten rugs
  • Empty wastebaskets
  • Keep pets out of the way; make sure all pet areas are clean and free of odor

Research Before You Hire:

Whether you need an architect, gardener, interior designer or contractor, it is always important to do a background check prior to hiring a professional. Get references from family or friends and interview them - checking is critical. The most important quality to look for is trust, not initial price.

- Return to Top -