209-988-5254 | Century21 Select | DRE #01225017. – Serving Stanislaus, San Joaquin & Merced Counties.
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Feeling a bit unsure, or even afraid, to move with everything going on right now? The decision to move shouldn’t be scary, it should be exciting. And the best way to eliminate any fear is to work with a pro.
Real estate agents are so much more than just transaction facilitators; they’re trusted guides to help you navigate the complexities of the housing market with confidence and ease. And a great agent can turn what may feel like a daunting process into a manageable—and even enjoyable—experience.
That’s why, in a Bright MLS survey, respondents agreed partnering with an agent is essential and helps cut down on their stress:
Here are just a few examples of why that expertise can give you so much peace of mind.
You may be seeing misleading headlines about a potential market crash, falling prices, and more. And when you’re not an expert yourself, it’s easy to get swept up in the clickbait and let that scare you. As Jason Lewris, Co-Founder and Chief Data Officer at Parcl, says:
“In the absence of trustworthy, up-to-date information, real estate decisions are increasingly being driven by fear, uncertainty, and doubt.”
A real estate agent is there to help you separate fact from fiction and to debunk any headline that does more to terrify than clarify. With their deep understanding of local market trends, home values, inventory levels, and more, they’ll help you feel more confident in your decision.
Is this your first time going through the process as a buyer or a seller? Don’t worry. Your agent will walk you through every step along the way, from the initial conversation all the way to closing day. As NerdWallet explains:
“If it’s your first time buying — or selling — you’re likely to come across terms you don’t recognize and tasks that seem baffling. What’s the difference between pending and contingent? Why do you need title insurance? How thoroughly do you need to fill out disclosure forms? Your agent should be able to confidently and competently explain it all.”
And if you’ve done this before, but it’s been a while, an agent will tailor how they explain it all to your previous experience. They won’t bog you down with details, they’ll only give you as much of a refresher as you want and need.
Does the thought of dealing with the back and forth of the transaction make your palms sweaty? Put that anxiety aside. Your agent is a skilled negotiator trained for these exact scenarios. And the best part is, they work for you. So, it’s your goals they’re using that expertise to fight for.
They’ll work to secure the best possible terms for you, whether it’s getting a better price as a homebuyer or negotiating a higher sale price as a seller. This removes the fear of a bad deal or being taken advantage of during the process.
Worried something is going come up that you don’t know how to handle? Rest assured, your agent has you covered.
Agents are skilled problem-solvers. They not only address issues, but they get ahead of them before they become deal-breakers – and that helps keep the process on track. So, if any challenges do pop up, know your agent has the skills and experience necessary to find a solution that works for you.
Don’t let fear or uncertainty hold you back from achieving your goals. With an expert agent by your side, you can move forward with confidence.
Source: keepingcurrentmatters.com ~ Image: Canva Pro
7 Units 3 Duplexes and One Single. Historic part of Modesto. Quaint Homes with a lot of Character, Detached Garages with Alley Access.
Preapproval differs slightly from prequalification, but knowing how both work can be helpful.
Setting a budget and checking your credit are important steps in the mortgage preapproval process.
When you’re serious about buying a home, one of the first steps you should take is getting a mortgage preapproval. It’s a relatively quick process that involves a lender pulling your credit and reviewing your financial situation to determine whether you qualify for a home loan and how much house you can afford.
You’ll need to give the lender several documents, including pay stubs, tax forms and bank statements, to verify your earnings, debts and assets. If you qualify based on that information, the lender will estimate the amount you can borrow and document it in a preapproval letter.
When you’re ready for preapproval, understanding how this step works and doing a little prep can be helpful.
When you start researching mortgage rates, you may hear lenders use the terms preapproval and prequalification interchangeably. Both terms refer to a document that states a lender is tentatively willing to lend you up to a certain amount, based on information you provide. The key difference is whether the lender verifies that information.
A prequalification involves plugging some financial details into an online form or having an informal conversation with a lender. You’ll answer questions about your credit score and finances, and your lender uses that information to estimate your loan amount. “The lender doesn’t pull your credit report or verify your information to determine what you can afford,” says Melissa Cohn, regional vice president with William Raveis Mortgage.
The prequalification roughly estimates how much you can borrow and the interest rate you’ll receive, but it doesn’t carry the same weight as preapproval because the lender hasn’t verified your information.
A preapproval is more in-depth because “it says that the lender has put eyes on your tax returns, your W-2s, your pay stubs, your assets, your credit – and verified the accuracy of the information you provided,” says Nicole Rueth, mortgage advisor with Movement Mortgage. This puts you into a position where you can set a realistic housing budget and negotiate a purchase contract with a seller.
The preapproval letter is usually good for 60 to 90 days to show an agent or a seller that you’re working with a lender. Sellers typically require you to include a preapproval letter with your purchase offer, so having one from the start can put you ahead of other buyers who don’t have one.
Just keep in mind it doesn’t guarantee you a loan – you’ll still have to go through the underwriting process later – and it’s not a binding agreement. You can still shop around for lenders once you select a house.
How to Get Preapproved for a Mortgage
Understanding the mortgage preapproval process can help you prepare your finances for it. What to do:
A lender can preapprove you to borrow a certain amount, but you may choose to borrow less. One way to set a monthly mortgage budget is by using the amount you’re currently paying toward housing. Or you can start fresh: Subtract all of your nonhousing expenses from your take-home pay to estimate how much you can put toward a home loan.
Lenders do a version of this when checking your debt-to-income ratio, or DTI. Most lenders like to see that your combined debts equal less than 36% of your income before taxes, though you could be approved with a DTI of 45% to 50%.
The minimum down payment you need depends on the type of mortgage you get and the lender’s requirements, and it can vary from 0% to 20% of the home’s purchase price. You can choose to put down more, but consider your other needs. You’ll also need to cover closing costs, and it’s a good idea to have cash reserves in the bank.
Your credit history and credit score are major factors in determining whether you’re preapproved and what interest rate you receive. You can pull a free report from each of the three credit bureaus weekly at AnnualCreditReport.com. Read through the reports and check for errors, such as incorrect account balances and duplications, and signs of potential identity theft, like new accounts you don’t recognize. You can dispute these errors and report identity theft to the credit bureaus.
If your score has room to improve, you can do so by paying down debt and making on-time payments every month.
Lenders will look at your credit history, income, assets and debts to see whether you should be preapproved for a mortgage. Before applying for preapproval, gather the following:
The lender also pulls your credit scores and credit reports to check for current debts. When going through your bank statements, the lender “confirms you have the assets to cover your down payment and closing costs, then looks for additional debts that aren’t reporting to the credit bureaus,” Rueth says. These may include alimony, child support and payments for buy now, pay later services.
If you’re self-employed or you have other special circumstances, you will need more documents, such as:
Make a list of lenders that operate in your state, offer the type of home loan you need and have a strong reputation. Call one of the lenders and ask any questions you have, such as the loans it offers and closing costs it charges. If you feel comfortable with the lender, ask for a preapproval. You can get more than one preapproval to shop for the best rate, but it depends on your situation.
“Getting several preapprovals could help you speed up the closing time line if your offer’s accepted,” Rueth says. “I would do the work upfront. I wouldn’t want to wait until I’m under the gun and feel trapped.”
The lender will get consent to pull your credit and ask questions about your financial situation. It may ask you to upload your documents in an online portal or to email them. Once you have the preapproval letter, you can shop for homes within your price range and submit your purchase offer.
Take these steps to avoid being denied a mortgage preapproval:
Source: money.usnews.com ~ By: Kim Porter ~ Image: Canva Pro
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Prospective first-time buyers face some tough decisions. Should you buy a starter home now or save to purchase your forever home?
Key Takeaways:
Most homeowners begin with a starter home, a smaller home that needs a little TLC in a more affordable price range. But these days, starter homes are hard to come by.
Starter homes are much more expensive than they were a few years ago, and the ones that do go on the market face fierce competition. This has left many first-time buyers wondering if a starter home is worth it, and whether they should wait to purchase their forever home instead.
A starter home is the first home someone can typically afford to buy. Starter homes are smaller, lower priced homes that help first-time buyers get their foot in the door of homeownership.
According to Michaela Cancel, senior vice president of Neighborhood Development Company, a starter home can be a condo, townhouse or stand-alone structure with limited bedrooms and is often under 1,500 square feet. Homeowners usually live in these dwellings for three to five years or until they see a return on their investment.
“(Starter homes) typically are either new middle market construction grade units or are much older housing stock that come with substantial maintenance costs,” Cancel says. “Either way, they don’t have a lot of bells and whistles as older housing stock doesn’t reflect today’s preferences and middle market construction grade units are budget-conscious/friendly for first-time homebuyers.”
Because of the low supply in the current housing market, starter homes are challenging to find and much more expensive than they were a few years ago.
“The definition of a starter home hasn’t necessarily changed; it just isn’t available in the traditional sense,” says Kurt Carlton, co-founder and president at New Western, a real estate investment marketplace. “With roughly 4 out of 5 homeowners holding onto a mortgage under 5%, no one is moving or putting their home on the market.”
Thanks to higher home prices, starter homes aren’t necessarily starter homes anymore. According to Redfin, buyers need to earn about $80,000 to afford a median-priced starter home.
In December 2019, the national median existing-home price for all housing types was $274,500, according to National Association of Realtors data. Since then, home prices have skyrocketed. In August 2024, NAR reported that the median existing-home sales price was $416,700 – a 52% increase since 2019.
In 2023, there were only 352,500 affordable listings, down 40.9% from 596,135 in 2022, according to Redfin. “That means that what we used to call the starter home has become an endangered species,” Carlton says.
A listing is considered affordable if the estimated monthly mortgage payment is no more than 30% of the local county’s median household income. The national share was calculated by taking the sum of affordable listings in the metros Redfin analyzed and dividing it by the sum of all listings in those metros.
New housing starts have always been significantly behind demand, Cancel says, but the U.S. fell even further behind in housing supply during the financial crisis of 2008, when homebuilders saw demand drop as consumers began to fear overpaying for a crashing real estate market. “The last decade saw marginal improvements in the supply-demand imbalance, but the shortage took another major hit from the pandemic,” Cancel adds.
Carlton says affordable housing is also harder to come by because there are currently about 15 million vacant homes in the U.S. that need renovating to become habitable. “The good news for housing supply is that independent investors are finding these homes, fixing and flipping them in the middle-income range and getting them back on the market,” Carlton says.
Interest rates are another affordability challenge, Cancel says, and homeowners locked into a mortgage rate under 5% cannot afford to trade up. “And, to add insult to injury, the shortage of these resale homes on the market has caused entry-level homes to surge in value, where new homebuyers are already competing with developers paying all cash for teardowns,” Cancel says.
Prospective buyers can always build a starter home, but it can be difficult finding a company that builds more affordable homes. Data from the Census Bureau shows that 40% of homes constructed in 1980 were considered entry-level homes. In 2019, only 7% of homes were entry-level, according to a 2021 report from Freddie Mac, and almost every state is building fewer starter homes.
Clint Jordan, realtor at The Jordan Group and founder of Mil-Estate Network, says builders have focused on higher-end homes due to the increased profitability. “Building material costs have risen dramatically in recent years, labor shortages are rampant and zoning laws in some areas make it tough to develop smaller, more affordable homes,” he says.
Most of these costs are being passed along to buyers.
According to Jordan, prospective buyers may have better luck in the existing-home market. “Existing homes, on the other hand, often come at a more affordable price point because they don’t carry the same upfront costs that new builds do,” he says. “Plus, you can move in much faster and start building equity right away.”
While some builders have recognized the demand for starter homes and are trying to meet it, Jordan says it’s not happening quickly enough. “Even if the supply is increased, it doesn’t necessarily mean those homes will be as affordable as buyers are hoping,” Jordan explains.
Unlike a starter home, which focuses on the basics, a forever home is a larger single-family home where you can see yourself living for at least 10 years, according to Zillow. Forever homes are roughly double the price of starter homes, with about 2,000 square feet of living space, three bedrooms and two bathrooms. Forever homes have more space to accommodate life-changing events like a growing family.
Homeowners in forever homes have stable jobs and like the area where they live. Forever homes don’t necessarily have to be forever, but homeowners usually don’t have any plans to move in the near future.
“A forever home is one you intend to stay in for decades, whereas a starter home is often viewed as a stepping stone on your real estate journey,” Jordan says.
Prospective first-time buyers face some tough decisions. Should you buy a starter home now or save to purchase your forever home?
“I am a huge fan of buying now if you are ready. Waiting costs and loses you money,” Jordan says. “Every month you pay rent, you are throwing away money, losing equity and not gaining from the home’s appreciation.”
Buying a home instead of renting gives you the chance to build valuable equity. However, buying a home is only good if you’re in the financial position to do so. This means you need a realistic understanding of how much it costs to purchase a home, including the down payment, closing costs and ongoing costs associated with homeownership.
You can also take steps to make yourself a more creditworthy borrower, which increases your chances of securing a lower interest rate on your mortgage. Saving for a larger down payment can also reduce your monthly mortgage payment, often the biggest challenge for first-time buyers.
Carlton says first-time buyers still want a starter home they can afford, but instead of sitting on the sidelines, they’re shifting their priorities as far as what they want in their first home.
“They are living with aging parents or with adult siblings or friends to get more house for their money and adding a mother-in-law unit to accommodate more people,” Carlton says. “The definition of a starter home is evolving and expanding to satisfy the middle-income buyer rather than changing altogether.”
Source: realestate.usnews.com ~ By: Josephine Nesbit ~ Image: Canva Pro
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If you’re self-employed and want to buy a home, you’ll likely face a bit more scrutiny than borrowers with traditional wages. That’s because mortgage lenders routinely require proof of consistent income for mortgage approval, which can be tricky when you can’t show a W-2 or recent paycheck. Self-employed borrowers should be prepared to provide evidence of active income – simply put, the money you earn for your work.
First, you should understand what it means to be classified as self-employed. In general, lenders will consider you self-employed if a significant portion of your income comes from being a gig worker, freelancer or independent contractor.
If you receive 1099 tax forms rather than a W-2 from an employer, that will also indicate self-employment. Lastly, if you own 25% or more in a business, then you’re self-employed as far as the lender is concerned.
While self-employed borrowers are held to the same lending standards as W-2 workers, the mortgage process itself can be more challenging.
In general, lenders are concerned whether all applicants, including self-employed workers, can consistently repay their loans. They’ll need to see that your income is high enough to pay for your mortgage, that it’s likely to remain high, and that you have a good track record of repaying your debts. This is easier to do when income is steady and predictable, which isn’t always the case for self-employed people.
Proving the stability of your business requires documentation, including evidence of work, payments and activity supporting business operations, such as a business website. “Every customer is so uniquely qualified and their businesses are so different, so each one needs to be looked at differently,” says Ashley Moore, community lending manager at JPMorgan Chase.
Lenders typically look at your income for the past two years – and for the self-employed, it will be your net profit, not your gross income. That is, they will look at the total income you have left after your deducted expenses.
If you earned more in Year 2, they will take an average of the two years. If you made less in Year 2, they will go by the lower-earning year. Lenders might be wary if your income drops significantly, so expect to provide an explanation if that’s the case.
Generally, borrowers need at least two years of self-employment income to qualify for a mortgage, as per Fannie Mae and Freddie Mac guidelines. In some cases, borrowers who are self-employed for just one year may still qualify if they meet other criteria, like working in the years prior in the same occupation with comparable or higher income.
Without two years of business records, you can expect a higher level of scrutiny, and any prior employment will have to be verified, as well.
Qualifying for a mortgage when you’re self-employed means showing the lender that you can make payments for the entire length of the loan.
Here’s what lenders want to see from self-employed mortgage applicants:
However, Cahan notes that loan officers who have experience working with this type of borrower should know how to interpret a tax return and run the proper calculations in these cases. He recommends that self-employed people simply ask the loan officer to show them the actual worksheet the officer used to come up with the effective income amount. “If they don’t know how to break it down for you, move on to the next lender,” he says.
Lenders require complete financial documentation for a mortgage application. When you’re self-employed, you’ll need to provide both business and personal financial documents. Many lenders will require income verification early in the mortgage timeline and then again just before closing. Although requirements will vary by lender, be prepared to submit:
Some lenders may require further documentation, such as statements from your accountant and clients. Be sure your documents are up to date and organized before you submit.
Mortgages backed by government-sponsored enterprises Fannie Mae and Freddie Mac require verification of business operations, so you may need to provide evidence of work, such as invoices, business payments or active websites. These measures are normally required 120 days before closing on a mortgage, but self-employed borrowers may have to offer proof of steady income again as the closing date approaches.
If you’re self-employed and considering a home purchase in the next few years, take these steps to make yourself a more attractive borrower:
If you’re self-employed, you can explore the same mortgage programs as others – including conventional loans, Federal Housing Administration loans, Veterans Affairs loans and U.S. Department of Agriculture loans. You’ll still need to meet each program’s criteria in order to qualify, as well as provide any additional documentation related to your self-employed status.
If you’ve only been in business a short while or have a past line of work that doesn’t qualify as related to your current business, you might consider an alternative loan program called a nonqualified mortgage. Because these loans do not follow government guidelines as a qualified mortgage does, a non-QM offers more leeway when it comes to underwriting them for business owners.
In order to make a non-QM mortgage work, you’ll likely need a large down payment and may have higher interest rates or fees than standard home loans. Because you don’t have two years of business tax returns, lenders will look at your bank statements instead to get a sense of your cash flow. Using those documents, they can determine how much income you have coming in on a regular basis. Once you eventually have enough business history to qualify for a regular mortgage, you might try refinancing your non-QM loan.
However, be sure to work with a reputable lender if you decide to pursue a non-QM loan, since these aren’t as regulated as traditional home loans.
Source: money.usnews.com ~ By: Dawn Papandrea ~ Image: Canva Pro
16.7 Acres of Country Home in the Gratton School District! Young Trees were planted in 2017. This Large Ranch Home is 2176sf with 4 Bedrooms and 2 Full Baths. Recently New Remodeled Bathroom and Some Flooring. In the Last 5 years, the Roof, Septic, Well, and HVAC have been replaced. Old Charm with Large Living Spaces. The Home Site Pad is big enough to Add a Metal Shop, Park Trucks, and/or Setup for Animals. Almond Trees are Independence, Planted in 2017, and Very Good Producers on Lovell Root Stock. The spacing is 20×15. TID Flood Irrigation and Setup on a 15 Hp Booster Pump on Micro-Sprinklers, irrigates in One Set. There are Two Improvements in Ag Wells for Winter Irrigation or Frost Protection. Great Location. A Must See! The 2024 Almond Crop is included in the Sales Price!!