Top 8 Reasons to Buy or Sell in Winter 2017-North Shore Real Estate Trends

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Chances are, buyers looking for a Chicago North Shore home during the winter season are serious about buying and not simply shopping around. Showing off some of the home’s finer features isn’t easy covered in a potential blanket of snow, but there are a number of things sellers can do to attract buyers:

 1. Less competition. In the winter season, there are fewer homes on the market, so your home will have less competition. Encourage buyers by offering attractive pricing and incentives.

2. Interior focus. Providing photographs from the summer months is important, but now is the time to highlight the inside of your home. North Shore realtors know, furnished homes and those that are organized have more appeal, so make sure the beds are made, the furniture is well placed, and the counter tops and closets are clear of any clutter.

3. Exterior demands. Snow can alter the look of the overall property. Shovel and de-ice all paths and doorways. The driveway should be plowed, along with the sidewalks. Make sure that all outside lights and doorbells work. Consider more lights that could be installed to effectively highlight the best areas of the house.

4. Winter warmth. The colder months can create times at home enjoying family. You can stage your home to showcase winter warmth with such sights and smells as crackling fires, scented candles and eye catching, but tasteful wreaths to appeal to buyers and make them feel like your home could be their own. The key–don’t over do it though!

 FOR BUYERS

1. Lenders also usually have fewer loans to process and less paperwork to deal with (though this can change quickly if rates fluctuate). With lenders less hassled, you can expect a smoother process to get approved for a mortgage.

2. Winter may have fewer buyers in the market. Fewer buyers could mean less North Shore real estate property competition.

3. The winter season has fewer units on the market, and sellers tend to need to move from their property. You can use that to your advantage to get a favorable deal.

4.The negatives that turn off both buyers and sellers in winter can create a savvy real estate hunter’s dream. For the clued-in home buyer such negatives can lead to a real gem of a deal. The motto that could put some serious money in your pocket between now and spring, remember this: Imagine the future, and don’t let winter pull your strings! More INFO

For a view of homes available on the North Shore, or to get market status/housing reports, analysis, trends, or open house lists, feel free to stop by our North Shore Office at 640 Vernon Ave, Glencoe, Illinois.  Gloria Matlin works out of one of the Chicago North Shore’s top ranked realtor offices.  847-835-0236 or direct at 847-835-6058

www.gloriamatlin.com

The Difference Between Prequalification and Preapproval of a Mortgage: North Shore Real Estate

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Once you’re ready to purchase North Shore real estate, or any real estate for that matter; knowing the basics of prequalification and preapproval can be a financial and time preserving benefit for all involved.

There are different stages of the mortgage approval process, and it’s important to know what they are and what they mean. The breakdown below will shed light:

Prequalification is a lender’s estimate of how much you could be eligible to borrow based on information you supply. Prequalification does not mean you will get the loan. Prequalifications are usually free.  The standard questions a lender will ask or use to start to process:

  1. Does the prospective buyer have enough money to make a down payment and cover closing costs? Ideally, a buyer should have 20 percent of the home’s price as a down payment and between 2 and 7 percent of the price to cover closing costs.
  2. Is the prospective buyer’s income sufficient to afford your home? Ideally, buyers should spend no more than 28 percent of total income to cover PITI (principal, interest, taxes, and insurance).
  3. Does the prospective buyer have good credit?  Has a review and/or correction to a credit reporting status occurred.
  4. Does the prospective buyer have too much debt? If a buyer owes a great deal on car payments, credit cards, etc., he or she may not qualify for a mortgage.

With a pre-qualification in hand, this often means that you have a rate hold for 30-120 days. However, this is not a guarantee. There will be a number of conditions attached to the pre-qualification before it is fully approved. At this stage the lender hasn’t even seen your mortgage application.

Preapproval usually means that the lender has reviewed a mortgage application and is ready to process a mortgage loan based on the information and documentation you provided at the time you requested a preapproval. The preapproval will say how long it is valid for and may contain some other conditions for you to get the loan. Your lender may not require that you pay any fees except the cost of a credit report at the time processing starts. More information HERE

Our Glencoe, Illinois; top ranked Coldwell Banker Residential Real Estate office can be a source to depend on for mortgage lending needs.  Stop by today and we can guide you through various options for buying and selling North Shore real estate. We are a trusted member of the community, and have been for over 40 years; located at 640 Vernon Ave in the heart of downtown Glencoe.

Top Loan Types & Lender Checklist: North Shore Real Estate

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Chicago’s North Shore real estate buyers are benefiting from historic mortgage interest rates that continue to hover at or near 60-year low points. This is a great time to buy or sell for seasoned investors as well as first time home buyers. Every buyer and seller should have running knowledge or at least brush up on basic North Shore mortgage products and types. It’s also good to have a checklist of what’s needed to get the mortgage process rolling. Below are some handy-dandy tips to take note of:

  • Common mortgage terms.   Mortgages are generally available at 15, 20, or 30-year terms. In general, the longer the mortgage term, the lower the monthly payment.   However, you pay more interest overall if you borrow for a longer term.
  • Fixed or adjustable rate loans. A fixed rate allows you to lock in a low rate as long as you hold the mortgage and, in general, is usually a good choice if interest rates are low. An adjustable-rate mortgage is designed so that your loan’s interest rate will rise as market interest rates increase.  ARMs usually offer a lower rate in the first years of the mortgage. ARMs also usually have a limit as to how much the interest rate can be increased and how frequently they can be raised. These types of mortgages are a good choice when fixed interest rates are high or when you expect      your income to grow significantly in the coming years.
  • Balloon loans. These mortgages offer very low-interest rates for a short period of time —often three to seven years. Payments usually cover only the interest so the principal owed is not reduced. However, this type of loan may be a good choice if you think you will sell your home in a few years.
  • Government-backed mortgages. These loans (Fannie and Freddie) are sponsored by agencies such as the Federal Housing Administration or the Department of Veterans Affairs and offer special terms, including lower down payments or reduced interest rates to qualified buyers.

Slight variations in interest rates, loan amounts, and terms can significantly impact your monthly payment. For help in determining how much your monthly payment will be for various loan amounts, use an online mortgage calculator: HERE

North Shore Mortgage Lender Checklist: What you need for a real estate mortgage

  • W-2 forms — or business tax return forms if you’re self-employed — for the last two or three years for every
    person signing the loan.
  • Copies of at least one pay stub for each person signing the loan.
  • Account numbers of all your credit cards and the amounts for any outstanding balances.
  • Copies of two to four months of bank or credit union statements for both checking and savings accounts.
  • Lender, loan number, and amount owed on other installment loans, such as student loans and car loans.
  • Addresses where you’ve lived for the last five to seven years, with names of landlords if appropriate.
  • Copies of brokerage account statements for two to four months, as well as a list of any other major assets of value, such as a boat, RV, or stocks or bonds not held in a brokerage account.
  • Copies of your most recent 401(k) or other retirement account statement.
  • Documentation to verify additional income, such as child support or a pension.
  • Copies of personal tax forms for the last two to three years.

Our top producing Chicago-North Shore real estate office, located at 640 Vernon Ave-Glencoe, Illinois 60022 is a resource for mortgage product questions and guidance. Visit HERE for additional information on North Shore home loans, interest rates, homes for sale, homes for rent, and general real estate financing options.

Real Estate Terms Every Buyer and Seller Should Know: Chicago-North Shore Real Estate

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Below are definitions to be familiar with, if you are thinking of or are involved in buying or selling North Shore real estate. Or, just for your general knowledge. There are several terms, commonly used jargon, in the real estate industry that may appear to be a peculiar language all its own:

7/23 and 5/25 Mortgages Mortgages with a one-time rate adjustment after seven years and five years respectively.

3/1 5/1 7/1 and 10/1 ARMs Adjustable rate mortgages in which rate is fixed for three year five year seven year and 10-year periods respectively but may adjust annually after that.

Acceleration The right of the mortgagee (lender) to demand the immediate repayment of the mortgage loan balance upon the default of the mortgagor (borrower) or by using the right vested in the Due on Sale Clause.

Adjustable Rate Mortgage (ARM) A mortgage in which the interest rate is adjusted periodically based on a pre-selected index. Also sometimes known as a renegotiable rate mortgage variable rate mortgage or Canadian rollover mortgage. 

Adjustment Date The date that the interest rate changes on an adjustable rate mortgage (ARM).

Affordability Analysis An analysis of a buyer liabilities and available funds and considers the type of mortgage you plan to use the area where you want to purchase a home and the closing costs that are likely.

Appraisal An estimate of the value of property made by a qualified professional called an “appraiser. based on an appraiser’s knowledge experience and analysis of the property.

Assessment A local tax levied against a property for a specific purpose such as a sewer or street lights.

Assumption Fee The fee paid to a lender (usually by the purchaser of real property) when an assumption takes place.

Bridge Loan A second trust that is collateralized by the borrower’s present home allowing the proceeds to be used to close on a new house before the present home is sold. Also known as “swing loan.”

Buy Down When the lender and/or the home builder subsidized the mortgage by lowering the interest rate during the first few years of the loan. While the payments are initially low they will increase when the subsidy expires. 

Conventional Loan A mortgage not insured by FHA or guaranteed by VA.

Credit Report A report documenting the credit history and current status of a borrower’s credit standing.

Credit Risk Score A credit risk score is a statistical summary of the information contained in a consumer’s credit report. The most well-known type of credit risk score is the Fair Isaac or FICO score. This form of credit scoring is a mathematical summary calculation that assigns numerical values to various pieces of information in the credit report. The overall credit risk score is highly relative in the credit underwriting process for a mortgage loan.

Debt-to-Income Ratio The ratio expressed as a percentage which results when a borrower’s monthly payment obligation on long-term debts is divided by his or her gross monthly income. See housing expenses-to-income ratio.

Deferred Interest When a mortgage is written with a monthly payment that is less than required to satisfy the note rate the unpaid interest is deferred by adding it to the loan balance. See negative amortization.

Earnest Money Money given by a buyer to a seller as part of the purchase price to bind a transaction or assure payment.

Equal Credit Opportunity Act (ECOA) A federal law that requires lenders and other creditors to make credit equally available without discrimination based on race color religion national origin age sex marital status or receipt of income from public assistance programs.

Equity The difference between the fair market value and current indebtedness also referred to as the owner’s interest. The value an owner has in real estate over and above the obligation against the property.

Escrow Payment The part of a mortgagor hazard insurance mortgage insurance lease payments and other items as they become due.

Fixed Rate Mortgage The mortgage interest rate will remain the same on these mortgages throughout the term of the mortgage for the original borrower.

Foreclosure A legal process by which the lender or the seller forces a sale of a mortgaged property because the borrower has not met the terms of the mortgage. Also known as a repossession of property.

Market Value The highest price that a buyer would pay and the lowest price a seller would accept on a property. Market value may be different from the price a property could actually be sold for at a given time.

Preapproval The process of determining how much money you will be eligible to borrow before you apply for a loan.

Private Mortgage Insurance (PMI) In the event that you do not have a 20 percent down payment lenders will allow a smaller down payment – as low as 3 percent in some cases. With the smaller down payment loans however borrowers are usually required to carry private mortgage insurance. Private mortgage insurance will usually require an initial premium payment and may require an additional monthly fee depending on your loan’s structure.

Realtor® A real estate broker or an associate holding active membership in a local real estate board affiliated with the National Association of Realtors.

Survey A measurement of land prepared by a registered land surveyor showing the location of the land with reference to known points its dimensions and the location and dimensions of any buildings.

Third Party Origination When a lender uses another party to completely or partially originate process underwrite close fund or package the mortgages it plans to deliver to the secondary mortgage market.

Title A document that gives evidence of an individual’s ownership of property.

Underwriting The decision whether to make a loan to a potential home buyer based on credit employment assets and other factors and the matching of this risk to an appropriate rate and term or loan amount.

For More information on these terms as well as other mortgage terminology click HERE. Also, feel free to visit our Coldwell Banker office in Glencoe, IL 60022. 640 Vernon Ave in the heart of the downtown area. We can show you how these terms and others can impact a home for sale, rent, or for first time home buyers. Let our legendary 45 years of North Shore Real estate knowledge work for you!

 

 

 

Top Tips to Consider-Buying or Selling a North Shore Home Now?

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First let’s tackle selling your North Shore home. The response to that question is based on what your families’ goals are. If you don’t need or want to move for a few years it might make sense to wait for the housing industry to recover and prices to appreciate. However, if you wish to move within the next six to eighteen months, it is probably better to sell sooner rather than later. Here are 4 reasons why “now” may be best:

1. Distressed Properties Will Impact Prices

Distressed properties (foreclosures and short sales) on the market will increase this fall and winter. This will put tremendous downward pressure on prices for at least the next 12-18 months. Get your home sold before they become your competition.

2. Mortgages Will Become More Difficult to Attain

Lending standards are continuing to tighten. There is legislation currently being considered that will make it even harder for buyers to qualify. Less demand will equate to lower prices.

3. It is the Perfect Time to Move-Up

With prices where they are and interest rates at all time lows, there may have never been a better time to move-up into your dream home.

4. You Get to Move On with Your Life

Probably the most important reason to sell is so you can get on with your life. You are considering selling for a reason. Do not allow a less-than-stellar housing market prevent you from reaching your goals as an individual or as a family…MORE

Last but not least, let’s address buying a North Shore home. Market indicators suggest now is the time to do just that. Some will say realtors highlight this fact to create transactions and commissions. Because of that, listed below are supported quotes from individuals outside of the real estate profession who offer sound financial advice. Take note of the 3 quotes:

1.“It’s an excellent time to buy a house, either to live in for the long term or for investment income…Houses aren’t the magic wealth creators they were made out to be during the bubble. But when prices are low, loans are cheap and plump investment yields are scarce, buyers should jump.” It’s Time to Buy That House-WSJ

2.“The previous declines in house prices and the more recent drop in mortgage rates to record lows have created an unusual situation in which the median monthly mortgage payment is more or less the same as the median rental payment.”

3.“Even with a dismal 1% growth rate over 30 years, a $300,000 property would appreciate well over $100,000 giving the homeowner an additional nest egg for retirement… At a time when retirement is becoming much more challenging, an extra $400,000 (or likely more) can make a major difference not to mention the impact of NOT having to pay a mortgage.  How much less would you have to save for retirement if you didn’t pay the mortgage?” …MORE INFO

In the end, when real estate professionals, a trusted financial newspaper and an iconic financial magazine say that it now makes financial sense to purchase or sell a house, perhaps it is time.

Top Ways to Refinance Investment Property: Real Estate Market Trends

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Is it possible to refinance a property if you don’t live in it?  

Yes.

But even with mortgage rates as low as they are, for some people, “it just doesn’t make sense” for them to refinance a rental property, or they are being told they can’t refinance an investment property.

How can this be?

In today’s mortgage market, quite a few home loan programs for investment properties are available through Fannie Mae or Freddie Mac — but there are still portfolio lenders offering investment property programs that Fannie Mae and Freddie Mac don’t offer.

Translation: Just because one lender tells you it isn’t possible to refinance your investment property, it doesn’t mean that it isn’t possible.

For those people who have recently heard that it wasn’t possible to refinance their investment property, it is likely that they were given one of two common reasons: MORE