Benefits of Buying

Renting is overrated. The money is being thrown into the wind while your landlord is rolling in your hard earned cash and paying off their mortgage while telling you they’ll get to that leak under the sink “soon.” I remember renting one year when I didn’t even see the landlord. I couldn’t tell you what they looked like. My dishwasher was broken and the maintenance man told us to not use our health hazard heater because it was outdated. Needless to say it was a cold winter and we moved out of there quickly as possible. Does this sound like a familiar situation? Then you may be ready to sail into the sea of ownership where you are the Captain and that ship is under your control.

Buying a home comes with certain freedoms. One of those freedoms is not having a landlord. You are able to paint, hang wall art, and landscape as you please without the risk of not getting a deposit back. There are no noise restrictions, pet deposits, or remodeling. Butters, the hound, can run and be free in his house without his human worrying about what the landlord will say about his accident on the carpet. Renting stifles this ability to truly make a space your own. A home is yours to customize into a beautiful space that mirrors your personality with no guilt.


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Taxes are a big stressor. Who doesn’t want a little relief when April comes around? Homeowners are offered several tax breaks. Some of those include Mortgage Interest, Tax and Penalty Free IRA, Home Improvements, Energy Credits, Home Equity Loans, and Real Estate Taxes. There is even a Home Office credit if you work from home. So many deductions, so little stress.

A homeowner’s net worth is 45 times that of an average renter. While rent is never recovered, mortgage payments build equity. It is an investment in the future by increasing an individual’s net worth. Not to mention it is cheaper to buy than rent. The average mortgage is lower than a rental payment and over time the interest portion of the mortgage payment decreases therefore the interest that you pay will be lower than a rental cost.


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Having a home in a neighborhood provides a sense of community. You know your neighbors. You know where your children will grow up and go to school. You know that you can walk your dog every night with a peace of mind. One doesn’t always get that when renting because you never know when the rent may be raised depending on your lease. You may not even be able to renew your lease when the time comes. Community is a sense of stability and security.

Free yourself of the waves of rent, buy your dream boat.

 


Come to our First Time Home Buyers Workshop if you would like to learn more on August 26th:

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Small Home Updates that Make Big Changes

Many people want to add a little pizzazz to their homes but don’t know where to start. Whether it be to prepare to sell or for the owners personal appeal, these small updates can turn around an entire vibe to make a house a home.


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Never underestimate the power of a can of paint. One can completely revitalize a room. If you still have that pea green wall color that your friends complimented you on in the 1970’s then it may be time to change up your style. Fashions change and our tastes change with them. If you are selling then choose a neutral color even if they all look the same to you and are only slight variations of “baguette” or “camel.” If you just want to spice up your life then choose a hue that shows your personality.


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Replace old hardware on cabinets and drawers. I remember when my mother inherited our grandparents’ house. I had never really thought much of the handles to cabinets. My mother changed them because I am pretty sure they were the originals from 1955 when my grandparents bought the house. I immediately noticed the change even though I had never given them thought before. All her family members commented on them as well. It was such a little thing that made a large impression. Along with hardware, light fixtures and faucets are the next items that can really date a room. Replacing these with a more sleek look will instantly modernize the space.


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Give the outside love. The inside of a home is important, but the outside can be just as inviting or uninviting. Simple ways to add curb appeal is to add a small flowerbed around that tree in your front yard. You can paint your rusty mailbox to a nice warm tone. Of course, don’t forget to mow and edge the lawn. It is an easy and cheap fix to spruce up the yard. Placing flower pots around the porch and a few decorations can really increase the visual appeal and make you want to come home after a long day to sit on your relaxing porch.

 

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Keep your Cool

You love blasting your AC. I know it. We all do. But then you get your paperless billing statement and want to hide it from your spouse because they might cry. You don’t want to see them cry. When they do you are not sure if you should comfort them or put on armor because war is coming. That’s why we have a few helpful pointers on how you and your significant other to keep your cool mentally and physically.


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A more inexpensive investment would be to purchase some blackout curtains. Most heat throughout the day comes in through windows creating a greenhouse effect in the home. Simple changes like having heavy curtains, shutters, and keeping blinds closed can lower your average home temperature by up to 20 degrees. If you are home during the day and need some natural light then just keep the westward and eastward windows covered which is where the sun hits hardest.


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The AC unit is the most abused, blamed and neglected appliance in our possession. To save from wanting go out and kick it, try cleaning it instead. Once upon a time, my family was miserable. We blamed the AC for not being big enough for the square footage in our house. My savvy uncle goes out to look at the unit. It was COVERED in thick pollen. I mean one would think we painted it yellow. No air was able to enter the unit thus unable to enter our home. We shop vacuumed the entire thing and, like magic, we had AC again. Dirty air filters just like two inches of pollen also prevent efficient air flow throughout the house. Changing the AC filters regularly and maintaining a debris free unit can be cost effective ways to ensure your family doesn’t have a meltdown.


MB_0051_17JulyB6-3-insulation

Maybe you’re doing all these things already and need a stronger tactic. Maybe your home is older and you haven’t made repairs on it since you bought it. A good start is to check the insulation. Insulation is the best defense to protecting a home’s temperature. Experts say if there are visible floor joints in the attic then it is time to replace the insulation. To begin you can get an energy audit. A professional will come out to inspect your home for air leaks, check your furnace and water heater to make sure it is working properly, and look for any insulation issues. From there you will have a better understanding of what you should address.

These are just a few of the numerous things you can start to prevent a heat stroke or mild heart attack at the sight of your energy costs. We are just looking out for your health and hospital bills.

 

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The OKC Bucket List: Outdoor Escapades and Eats

 

Having trouble beating the summer bummers? These entertaining activities will keep you from losing your mind and your tan line. Oklahoma is a thriving community in the summer season so relax and let the fun divert all your cares.

 


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1. Reach Great Heights. On the Wheeler District’s Ferris Wheel you can get an amazing view of the river and downtown. The Wheel was bought on Ebay and originally stood on California’s Santa Monica Pier. The district often has food trucks and festivals for your dining pleasure. Only $6 per ride makes for an affordable memory. We recommend going at night for a romantic evening gaze of a sparkling skyline, still flowing waters and an Oklahoma sunset. Ahhhh.


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2. Get Insomnia. The one time it may benefit you to get insomnia is to go to Insomnia Cookies. They have a variety of desserts including cookies, brownies and ice cream. If your blood sugar is especially low then you’ll want to indulge in a Deluxe Cookiewich to satisfy the craving. The best part about this fine establishment is that they are open until 3am, not to mention that they deliver. So you can feel good about not being able to sleep.


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3. Embark on a Ride. Spokies is Oklahoma City’s only bike sharing system. You can glide through traffic without having to worry about pesky parking. On your ride, you’ll be able to tour Downtown, Midtown and historic neighborhoods from its eight locations around town. For a small fee, you can ride for 30 minutes or get a pass that allows hourly use. Embark wanted to provide eco-friendly and affordable transit to those in need of fun and fast transportation.


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4. Sport About. The Boathouse District contains an exciting day for the family. Riversport Adventures is hours of thrills with water rafting, zip lines, rope courses, tubing, kayaking and slides. This will not disappoint the adventure seekers in your group. You can choose from a day or season pass or even a single experience for the more serene adventurer.


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5. Reconnect with Nature. Do you miss the forests but are stuck in the city? Martin Nature Center is where you should be. Tucked away in Oklahoma City is this amazing reserve. Several trails will take you over a river, past prairie dogs, and up to a bird observation center. It is the perfect place to trick yourself into thinking that you’re hiking a National State Park. Looking is free. Try not to take home a prairie dog though.


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Mortgage Forbearance: the what, when, & how!

What it is

Forbearance isn’t a free pass; nor is it a one-size-fits-all solution. It’s an individual agreement between lender and borrower to provide some short-term relief. The forbearance period is something you negotiate with the lender—it can last from a month to a year, although the average is three to four months. The idea is to cut borrowers some slack until they can resume paying the original mortgage as usual.

“Our primary goal is to help delinquent borrowers avoid foreclosure and stay in their homes,” says Brad German, a spokesman for the Federal Home Loan Mortgage Corp. (Freddie Mac), which purchases home loans from lenders.

When to act

Immediately! The first and most important step in seeking forbearance is to contact your lender the minute you know you won’t be able to make a payment. The worst thing you can do is to stop paying, hide your head in the sand, and pray the lender won’t notice. Not only will the lender notice, it’ll report late payments to credit bureaus, and be less likely to extend forbearance if you ask for it.

“As long as you’re the one calling and telling them there’s a problem, the lender will most likely work with you,” says Kevin Lynch, assistant professor of insurance at the American College for Financial Services in Bryn Mawr, PA. “If you just quit paying your bills, and they have to call you, it’s cast in an entirely different light. And that light will not be favorable.”

What to say

Tell the truth—Family medical crisis? Job layoff?—and provide as much detail and proof that your lender requires. From there, the lender may agree to extend forbearance, but perhaps not off the bat before you discuss other options first.

Most lenders prefer to offer a loan modification that permanently reduces your monthly payments, often for a lower interest rate, but stretches your loan over a longer period of time. Or, if you’ve fallen behind on your mortgage but can now resume regular payments, a lender may agree to a repayment plan where a portion of the overdue mortgage amount is added to your regular payments until you catch up. Freddie Mac reports that in 2015, its participating members structured 6,000 mortgage forbearances, compared with 21,000 repayment plans and 54,000 loan modifications. The type of mortgage help you get depends on the duration of your hardship and what your particular lender is willing to offer.

If the lender offers forbearance, you both will agree to the length of the forbearance period, the amount of a reduced payment, and the eventual terms of repayment. Though tempting, don’t ask for more forbearance time than you need, but also don’t agree to less time than you think it will take to get back on your feet.

What happens once your time is up?

After the forbearance or the extension has ended, you’ll have to repay the amount that was suspended or reduced—principal, interest, taxes, insurance. Typically, no extra interest is charged on the payments you missed. You can make a one-time payment for the amount due, or add on payments to your regular mortgage until you’re up to date. If the hardship continues, some lenders will extend the forbearance for a few more months, or else you can “cure” the past due amount by modifying your loan. Most often, the loans are modified, says German.

What does forbearance do to your credit?

Nothing, according to FICO—the software company that creates algorithms that credit bureaus use to determine how creditworthy you are.

“Generally, forbearance is not likely to have any impact on the credit score,” says Ethan Dornhelm, a FICO senior director of model development. Lenders may (or may not) report to credit companies the existence of a mortgage forbearance, but it definitely does not wreck your credit like being delinquent on a mortgage. All told, it could be just the timeout you need to get back on your feet.

Five pieces of priceless advice to 1st time home buyers!

1. Find out how much you can borrow

Many factors impact the amount of money that your bank is willing to lend you. This includes your income, down payment, credit score, outgoings and current debts along with many other variables.

This is one of the most crucial stages of the home buying process, so seek legitimate advice that allows you to plan appropriately. Realistically, you should do this before you start seriously looking at properties so that you know which homes to look at.

2. Do your research

Regardless of whether you are a first-time home buyer, getting an idea of what’s on the market is essential. Don’t always just look at a house’s face value; investigate what is going on in the surrounding areas, including future development plans, transport links, schools, crime rates and facilities.

The last thing you want to do is buy a house only to find out that an airport is being built next door.

3. Never underestimate the knowledge of mom and dad

The homebuying process was much different back when our parents bought their first home; however, you should never underestimate how knowledgeable they are on the general process.

Don’t be scared to ask for help, as they might have information and experience in handling issues that you might not have even considered. If you are lucky, they might be able to help you financially, so you should consult with them from the start.

4. Account for additional costs

It can be easy to forget the ancillary costs that come with buying a house, other than paying off your mortgage every month. Before you fully secure the property, consider the cost of taxes, valuation fees, agent fees, closing costs, HOA fees, etc.

In addition, take into consideration your other monthly outgoings such as utility bills, taxes, cable, insurance, and of course, the upfront cost of moving into and furnishing your home.

5. Don’t settle for the first property you see

There are very few people who manage to find a house that ticks all the boxes on the wish list, so make a list of the most important features that you aren’t willing to compromise on.

It can be tempting to move into a house that is already decorated and save yourself a few weeks of DIY. But it’s not worth it if you find out you will have to replace the whole central heating system three months down the line. Learn the difference between cosmetic issues and real ones.

You need to buy a home this Summer! Read why!

1. Prices Will Continue to Rise

CoreLogic’s latest Home Price Index reports that home prices have appreciated by 5.9% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 5.3% over the next year. The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report projects home values to appreciate by more than 3.2% a year for the next 5 years.

The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.

2. Mortgage Interest Rates Are Projected to Increase 

Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have remained around 4%. Most experts predict that they will begin to rise over the next 12 months. TheMortgage Bankers Association, Freddie Mac & the National Association of Realtors are in unison, projecting that rates will be up almost a full percentage point by this time next year.

An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home. 

3. Either Way You are Paying a Mortgage

As a paper from the Joint Center for Housing Studies at Harvard University explains:

“Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”

4. It’s Time to Move On with Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.

But what if they weren’t? Would you wait?

Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe now is the time to buy.

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

Home Titles can have issues! Here’s a few!

Mechanic liens: These are liens placed against a property that a general contractor or someone who worked to improve the home filed before beginning the work. This is to ensure the contractor gets paid, and the lien is to be released when the job is complete. The procedure for how mechanic liens are filed and processed vary widely from state to state. But problems can surface with these liens when the contractor doesn’t file a “satisfaction” of the lien and, thereby, the lien remains on the property title. Some mechanic liens will expire after a certain amount of time. Regardless, if a mechanic lien is still present when trying to go to settlement, the process can be time-consuming and could prompt a delay in closing.

Bankruptcies: This can be cause a problem, for example, when a seller buys a home while single but then marries someone with a recent bankruptcy. The title company must ensure the new spouse has signed off on the deed and also that the bankruptcy case has been discharged. If not, the title company would need to petition the court to release the property from the bankruptcy process.

Divorces: This often causes problems when a divorced spouse doesn’t remember to remove a lien for child support, even though the debt may have been resolved long ago.  Also, lien issues may arise from past-due spousal support or delinquent taxes.

Mortgage higher than expected? Read why and how to fix it.

Reason 1: You should have gotten an ARM

The majority of home buyers get a fixed-rate mortgage, because this guarantees the interest rate they pay will remain the same over the life of the loan. Yet certain home buyers could have saved big-time by taking on the more “risky” alternative: an adjustable-rate mortgage, which has an attractively low initial rate that adjusts according to the market after a set period.

Many people are leery of ARMs, which got a bad name during the housing bust when thousands of homeowners saw their monthly payments balloon after that initial period expired, but today’s ARMs have more safeguards for consumers. And they can be great for certain types of home buyers. If you don’t expect to stay in your new home for more than a few years, you can enjoy an ARM’s lower initial rate and sell your home before the adjustment takes effect.

“A really low teaser rate makes sense for someone who doesn’t plan on living in the house for that long,” says Kenneth Crichlow, the operations manager at First Rate Funding in Albany, NY. “If it’s a starter home, and they figure in five years they’ll be ready to get a bigger, better house, they won’t hit the point where the rate might go up.”

If this fits your timeline, check for ARMs with 5/1, 7/1, or 10/1 terms, depending on your plans (that first number indicates the year length of the introductory period, and the “1” means the rate will adjust once a year thereafter). These ensure your rate remains in place until you’re ready to move on, without risking a surprise boost.

Reason 2: You could have bought points but didn’t

One common way to pay less interest on a home loan is to purchase discount points upfront—that is, if you can afford them. Typically, a discount point costs 1% of the home’s value. For a $200,000 house, you can pay $2,000 to reduce your interest rate by 0.25% (the percentage can vary by lender).

You might find this ridiculous—paying more upfront just for the slightest change in your interest rate? Boo, hiss. But this can really work out in the long term.

For that $200,000 home, for example, buying just 2 points to knock your interest rate from 5% to 4.5% can lower your monthly payments from $1,074 to $1,013 a month, saving you $732 per year—and $21,699 over the life of a 30-year loan.

Unlike an ARM, you’ll need to stay in your house longer to make this worthwhile—at least six years, to recoup the $4,000 for the points.

Reason 3: You didn’t use a broker

Even if you consider yourself financially savvy, a mortgage broker can save you a major chunk of change over the life of your loan.

“If you want to get the best possible mortgage for you and your family, the most important thing is to find a mortgage adviser who can offer you options and keep an open mind,” says Casey Fleming, author of “The Loan Guide: How to Get the Best Possible Mortgage.”

There are just so many types of mortgages out there, a broker or adviser (an adviser typically works with one bank, whereas a broker is independent) can be incredibly helpful in finding options that fit your situation.

“The right loan depends on your circumstances, goals, and concerns,” says Fleming. “One-solution mortgage lenders do a huge disservice to customers. They don’t look at the big picture and offer options that solve the concerns that the consumer either has, or should have.”

Reason 4: Things have changed—but your mortgage hasn’t

Once you’ve secured your mortgage, your work is done, right? Not necessarily. Mortgages can, and should, move with the times. For instance, if interest rates have plummeted, you could save a bundle by refinancing at a lower rate. Or even if interest rates have stayed steady, major changes may have happened with you.

For instance, when you purchased your home, you might have been aiming for the lowest monthly cost possible, since that’s all you could afford. Maybe you bought a $200,000 home and selected a 30-year fixed-rate mortgage that costs $1,074 per month. Which is fine, but at 5% interest, by the time those 30 years are up, you will have paid about as much in interest as the principal—another $200,000.

So if your income has risen significantly since you first got your mortgage, you might want to refinance for a 15-year term. Your monthly payments will rise, but only to $1,288 per month, and if you can afford them, you’d save a whopping $90,000 in interest by not stretching it out over 30 years. Best of all? You’ll be mortgage-free in half the time.

With your Realtor by your side, let’s make an offer!

Making an Offer
Once you find a home you like, your agent should help you to put together an offer that will be formalized in the purchase and sales agreement, a binding contract between you and the seller.

Consider how aggressive you want to be in negotiations and how competitive the market is (after all, until your offer has been accepted, the seller can take other offers). If you’re hoping to conserve cash, then consider making a stipulation that the seller contribute to closing costs — the amount varies depending on the type of mortgage and down payment amount, but can range from 3 to 9 percent of the sale price.

Also decide whether you want your offer to be subject to the home passing inspection, and what type of inspection. A traditional home inspection covers any flaws in the property so that you know exactly what you’re getting into. You can also include a pest inspection, radon testing, and a bunch of other options.

I was prepared for an endless back-and-forth with the seller (maybe I watch too much TV), but our negotiation was short. We made an offer, the seller countered, and our agent advised us to come back with our “best and final” offer to let the seller know that we were done negotiating. They accepted.