I know, most people think that bigger is better. Statistics show that the average home is twice as big as it was in 1950. But, there is a lot to be said for a smaller house.

Review Your Lifestyle

Deciding how much space you really need begins with understanding your lifestyle. Are you active or a homebody? Do you entertain often and throw large holiday parties, or do you tend to go out? What about guests — do you have a large extended family that visits throughout the year, or do you do most of the traveling? Our spaces should be a reflection of who we are rather than what others expect us to be.

Understand Your Priorities

Large homes typically mean large maintenance commitments. Yard work, snow removal, window cleaning, painting, and housekeeping can all add up quickly.

If your time or your money is in short supply, consider how a large home might stress other areas of your life or tax your resources. Likewise, consider how much you enjoy maintenance tasks. Do you delight in all the responsibilities that come with owning a large home, or would you rather be free to pursue other activities?

Estimate Future Needs

Our lives are constantly evolving, and what works for us today may not work tomorrow. Do you plan on having a large family? Will you likely be responsible for the care of an aging parent or in-law at some point? Will your income in retirement be reduced to such a degree that the taxes and utilities on a large home might make it unaffordable? Understand how the changes in your life could affect your space needs down the road.

Benefits of Smaller Homes

Large homes can be dramatic and beautiful, but smaller homes aren’t without their charms (and benefits). Whether you’re building or buying small, here are some pluses to consider.

They’re Clutter-Busters

It’s tough to accumulate too much when space is at premium. Smaller spaces help control clutter by encouraging us to differentiate between wants and needs and filter the objects we surround ourselves with. If you have minimalist leanings, consider minimizing your square footage first — the rest will follow.

They Consume Less Energy

A smaller physical footprint usually equals a smaller utility bill. Smaller spaces with more modest room dimensions mean there’s less to heat and cool.

They’re Less Expensive to Build and Buy

The cost of building a new structure is usually driven by a combination of materials and labor. Smaller homes that are well-designed with an eye toward simplicity tend to be less expensive to build. Likewise, since the resale price of an existing home is dictated, at least in part, by square footage, smaller homes tend to be less expensive. Whether building or buying, reining in the square footage can help rein in your budget.

They Encourage Activity and Interaction

While it’s less obvious than the other benefits we’ve covered, smaller homes can promote activity and interaction between family members. In large homes, it’s easy to get lost in our own separate corners and, whether we intend to or not, become a bit isolated throughout the day. Smaller homes encourage socializing and communication through sheer proximity.

Of course, there’s no one-size-fits-all approach to space needs. Each family is different, and everyone’s priorities and lifestyles are unique. But as we build the next generation of houses and consider buying and remodeling older homes, maybe it’s OK to err on the conservative side of size. Maybe “less is more” overstates the case, but less may truly be more rewarding.

Ruth Schoenherr is a mortgage broker who will help you find home loans in the Clearwater, Palm Harbor, Largo, Safety Harbor, St Petersburg and Tampa Bay area. For more information, go to her web site at www.ClearwaterMortgageBroker.net.

With home values on the rise in America, cash-out mortgage refinances (frequently

referred to as “cash-out refis”) are also surging.

But while more and more homeowners are taking cash out of their homes, they’re doing so in a rather cautious manner. In fact, some analysts say they’re pulling the most conservative amounts in American history.

Some of this is no doubt a conservative, cautious reaction to some very hard lessons learned by many prior to the historic housing crash of the previous decade, when millions of borrowers fell woefully “underwater” on their home loans and home prices plummeted. The end result was millions of homes landing in foreclosure, sometimes resulting in entire subdivisions and communities morphing into “ghost town” status.

Of course, lending standards have tightened since then, but borrowers themselves are also inherently more risk-averse in 2016.

The activity level, however, is quite high.

According to Black Knight Financial Services, a full 42 percent of mortgage refinances in the fall of 2015 involved borrowers taking cash out of their homes. That marked the highest such figure since 2008, per the Black Knight data and analytics division.

The average cash-out amount was more than $60,000, and the average loan-to-value ratio after the refinance was just 67 percent – which represents the lowest such figure on record. Borrowers also left 33 percent equity remaining in their homes, on average.

Black Knight analyst figures also revealed there were $64 billion in total equity tapped via cash-out refinances over the past 12 calendar months – the highest dollar amount for any equivalent 12-month period since 2008-09, when the American financial crisis truly began to deepen.

Consumers today are saving more than they were in recent years, even though the financial crisis was much deeper and more acute just a few years ago. According to the U.S. Department of Commerce, the savings rate in December of 2015 actually rose to the highest level in three full years. Spending remained flat during this same period.

The average credit score of borrowers who are opting for cash-out refinances is fairly high at 748 – suggesting many lenders are still quite risk-averse themselves.

The Federal Reserve has also played a strong role here, having kept interest rates at near zero for seven years up until the final days of 2015.

It all adds up to many borrowers deciding to take out home equity loans – but taking only what they need, and often taking out full amortizing loans. This means they start paying back those loans immediately, with monthly principal payments on top of interest.

Ruth Schoenherr is a mortgage broker who will help you find home loans in the Clearwater, Palm Harbor, Largo, Safety Harbor, St Petersburg and Tampa Bay area. For more information, go to her web site at www.ClearwaterMortgageBroker.net.

According to Market Watch, Rates for home loans fell in line with Treasury yields, nudging mortgage rates to the lowest level of the year, Freddie Mac said Thursday.

The 30-year fixed-rate mortgage averaged 4.08%, down 2 basis points during the week. The 15-year fixed-rate mortgage averaged 3.34%, down from 3.36%. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.18%, down one basis point.

The 10-year Treasury yield TMUBMUSD10Y, +0.00%   fell five basis points during the week as investors continue to re-assess the expectations for fiscal stimulus and economic growth that followed the November election even as fresh geopolitical worries flared. The benchmark government bond breached a key technical level, 2.30%, twice during the week.

Mortgage rates generally track the 10-year Treasury, but that relationship faltered briefly earlier this year.

We all know that interest rates are going up soon. Consider getting your rate tied down. Ruth Schoenherr is a mortgage broker who will help you find home loans in the Clearwater, Palm Harbor, Largo, Safety Harbor, St Petersburg and Tampa Bay area. For more information, go to her web site at www.ClearwaterMortgageBroker.net.

While many people save for and anticipate the costs associated with buying a home, not

Happy family with agent realtor near new house.

everyone realizes that selling a house also comes with its share of fees.

In some cases, these fees can equal 10 percent of the home’s sale price. While many of these charges are negotiable and can fluctuate depending on the state of the real estate market, sellers should plan on paying at least some of these expenses.

Understanding the costs involved in selling a house can help prevent sticker shock when it comes time to close the sale.

Realtor’s commission

The real estate commission is often the largest fee that a seller has to pay. In many cases, these commissions can total 5 percent to 6 percent of the sale cost. For a $250,000 house, that would be about $15,000.

The commission fee is split between the seller’s agent and the buyer’s agent. Many homeowners are attempting to skip these high fees altogether by going the sell-it-yourself route. If you take this approach, though, be prepared to assume the Realtor’s responsibilities.

These duties can include negotiations, hiring a contract lawyer and taking care of the transfer of title.

Home repairs

If you are thinking about selling your home, chances are there are a few repairs that could be made to boost the appeal of your home and even raise its value.

So if you have been putting off painting a bedroom, repairing a staircase or fixing a leaky faucet, now is the time to make those changes.

Inspection repairs

You may spend several hundred dollars on cosmetic fixes on your home, but if the buyer’s home inspection reveals any major problems, you might be responsible for paying to fix them as well.

Major repairs could be a financial setback, so it’s important to be prepared for them before you choose to sell, especially if you anticipate a problem with your home passing inspection.

Staging

Buyers like to have a clear picture of what the home will look like with their items in it. If your home is currently vacant or your possessions are outdated, you may want to hire a professional stager who can arrange furniture and accessories.

A 2015 National Association of Realtors study revealed that the median cost for staging was $675.

Utilities

If you plan to move out before you sell your home, you will want to continue to pay for your heat and electricity. A home without heat and lighting can be very difficult to show to buyers. Your current utility bills can give you an idea of how much this will cost.

Mortgage payoff

The proceeds of your home will be used to pay off your mortgage, but it is likely that the number on your mortgage statement might be a little less than what you owe.

You’ll likely have to add prorated interest you’ve accrued to the total balance. Additionally, your lender may penalize you for paying early if you have a prepayment penalty associated with your mortgage.

Closing costs and additional fees

While the closing cost to sell a house is typically the responsibility of the buyer, don’t be surprised if you are asked to foot the bill, especially if you are trying to sell your home in a buyer’s market (one which has an influx of homes for sale).

Some of these costs may include HOA (or homeowners association) fees, property taxes, attorney fees, transfer taxes and title insurance. You also may be asked to pay an escrow fee, a brokerage fee and a courier fee. Altogether, closing costs can range from 2 percent to 4 percent of the selling price.

Many of the above fees are negotiable, and it is unlikely that a seller will be responsible for all of these. Still, it helps to be prepared. Knowing how much it will cost to sell a house can help you avoid disappointment when the time comes to put it on the market.

Ruth Schoenherr is a mortgage broker who will help you find home loans in the Clearwater, Palm Harbor, Largo, Safety Harbor, St Petersburg and Tampa Bay area. For more information, go to her web site at www.ClearwaterMortgageBroker.net.

Everyone says that it is a sellers market out there right now. We have all heard the stories

about sellers getting multiple offers and properties that sell within hours of being listed. A buyer that is looking for a house in this environment needs to have a little different thinking than they did a few years ago. Thanks and a tip of the hat for a few tips from Trulia.

1. Not making your best offer The drive to buy what we want for as little money as possible is practically in our DNA. So when most people see the listing price of a home, they naturally wonder what they can really get the house for. Offering lower than asking price is a perfectly reasonable strategy in some instances, such as if the house is overpriced compared with other similar homes in the area, or if it’s a buyer’s market with lots of available inventory. But trying to get a deal when you’re in a seller’s market might not be the best idea. “In a seller’s market, many buyers do not step up with a strong enough offer,” says David Dubin, a New York broker. “There is usually a shortage of inventory, and the competition is usually fierce. I always encourage a buyer to come in with a strong opening offer.”

2. Waiting too long to put in an offer Just as impulse-buying a home is risky, analyzing a home purchase to death in a seller’s market is inadvisable too. When you wait too long, “You are at high risk of losing [the home] you have fallen in love with,” says Dubin. Once you’ve determined the type of home you want, the location you desire, and your price range, and finally find a home that meets your qualifications, make an offer. To give yourself more leverage, be prepared to make a quick offer by having your finances in order — get a preapproval if you can. “Know how much you can truly afford, repair any credit issues, have your down payment in hand, and delay [other] major purchases,” says John Lazenby, president of the Orlando Regional Realtor Association in Florida.

3. Not working with a seasoned agent In a seller’s market, it benefits buyers to get all the help they can. If you have a seasoned agent on your side, you’ll probably have a better chance of getting the home you want. Plus, in most cases, buyers don’t pay real estate agents; sellers do. When you are competing against other buyers in a fast-paced market, it is vital to be ‘offer-ready. Working with a real estate professional saves tons of time and stress, as they know the ins and outs of the process and can provide tremendous insight regarding upcoming inventory.

4. Not being prequalified (or better yet, preapproved) for a loan You might know that you’ll be approved for a mortgage loan based on your steady income, your low debt-to-income ratio, and your high credit score — but the seller probably doesn’t know that. The only way to prove to the seller that you’re a qualified buyer is to be prequalified from a lender. “Prequalification is absolutely paramount. A buyer has zero advantage if they do not have the cash to purchase without a mortgage and haven’t taken the time to speak with a lender. Not getting prequalified sends a message to the seller that the buyer will lag on getting their ducks in order and aren’t taking their house hunting seriously. Preapproval is a step above prequalification (where you simply tell your lender your financial story). The preapproval process involves submitting a mortgage application, complete with supplying verifying documents. Preapproval from a reputable lender is key. Presenting this shows the seller that the buyer has already set the wheels in motion and is serious about making [the deal] a reality.”

5. Not being prepared for a bidding war If there is ever a time when a bidding war could be imminent, it’s during a seller’s market. No buyer wants to be involved in such a battle for fear of possibly going over budget. But broker Michael Holt presents this solution for buyers: “Set your search below your max budget to leave room in case of an over-asking bidding war.”

6. Not learning from your mistakes There’s no shame in learning that your offer has been declined, but it’s easy to get frustrated if your offers are declined over and over again. Learn from your last transaction(s) so you can get what you want.

Ruth Schoenherr is a mortgage broker who will help you find home loans in the Clearwater, Palm Harbor, Largo, Safety Harbor, St Petersburg and Tampa Bay area. For more information, go to her web site at www.ClearwaterMortgageBroker.net.

OK, you know that it is a seller’s market. There is a real shortage of houses for sale in many neighborhoods. Very often there are multiple offers for the same house. And the choice is not all about price. A seller is not going to favor an offer that might have contingencies. Cash is king. The next best thing is a pre-approved buyer – with a REAL pre-approval.

Get a REAL Pre-Approval

Some of you may not like this, but a real pre-approval requires work. There’s a documentation and time investment that starts well before you ever make a purchase offer.

Not only will this step tell you how much home you can actually afford, it is a vital part of a making strong offer in a seller’s market.

A real pre-approval requires all your income, asset and explanatory documents to be gathered, sorted and submitted to an actual human underwriter for an actual underwriting approval. You don’t just get validation of your qualifications, you become a better buyer.

But I haven’t even found the house yet? What if I don’t find a house at all?

Sorry, but this is a step the strong – the ones that you keep losing out to on your offers – buyers take. If you don’t find a house at all you will have wasted some effort gathering all the needed documentation – for sure. That said, it’s also self perpetuating.

The strong, human underwritten, mortgage commitment helps you win purchase offers. Without it, you might just fulfill your own prophecy and “not find a house at all”.

Be the strong buyer, do the work upfront. Period.

Whether buying your first home or your fifth, doing the appropriate legwork when selecting your real estate and mortgage team along with making sure you’re properly pre-approved before you start house hunting will dramatically increase your chances of home buying success.

It’ll save you a heck of a lot of stress during the process too.

Ruth Schoenherr is a mortgage broker who will help you find home loans in the Clearwater, Palm Harbor, Largo, Safety Harbor, St Petersburg and Tampa Bay area. For more information, go to her web site at www.ClearwaterMortgageBroker.net.

So the Fed raised interest rates this week for the first time in years. This is based on an improved economy. It is being forecasted that rates will continue to raised in the next year to keep inflation in check. If you have a variable rate mortgage, your payments will go up every time that Fed changes rates and this could cause a significant increase in your monthlypayment.

Keep in mind that the interest changes at a predetermined time and may change every year.

Reasons to consider refinancing your existing mortgage
◾If interest rates are going up, your ARM’s interest rate and monthly payment will go up. Your lender will notify you about any changes in rate or payment.
◾If the difference in your ARM’s adjusted interest rate and the rate on available fixed-rate loans is small, you can lock in a low rate before things go up.
◾If you’re not planning to sell your home in the near future, it may be costly for you to accept your ARM’s payment adjustment.

Compare fixed- and adjustable-rate mortgage estimates with our rate and payment calculator.

ARM refinancing options
◾You may want to consider refinancing to a new ARM if you can match the amount of time you think you’ll own your home with the new ARM’s initial fixed-rate period. Find out about  adjustable-rate loan options.
◾If you expect to remain in your existing home for a longer period of time, a fixed-rate mortgage protects you from rising interest rates and has fixed monthly principal and interest payments for the entire mortgage term.

Fixed-rate mortgage features
◾A shorter loan term provides faster equity growth and requires less total interest payments.
◾A longer loan term has lower monthly payments and may provide greater potential tax deductions. (Consult your tax advisor).

Ruth Schoenherr is a mortgage broker who will help you find home loans in the Clearwater, Palm Harbor, Largo, Safety Harbor, St Petersburg and Tampa Bay area. For more information, go to her web site at www.ClearwaterMortgageBroker.net.

If you haven’t looked into it recently, you’ll find that the real estate market has changed drastically recently. There is a real shortage of homes particularly in the lower cost single family market. When a good house goes up for sale, there are very often multiple full price offers submitted on that house in the first day or two. With this in mind, you will realize that you will be wasting your own and everyone else’s time if you are shopping for a house and you can’t prove your buying power. Refer the Huffington Post 11/2/2016.

Even though clients often like to look at houses when they don’t think they’re ready to move, when it’s time to get serious they absolutely must know where they stand.
As a potential home buyer, one of your first calls should be to a lender (if you need help, call your Realtor, she’ll have a few to recommend). If you want to be considered for that dream home, you’ve got to deliver a solid package to the seller in Denver’s highly competitive real estate market.

Pre-Approval vs Pre-Qualification -what’s the difference? Although the terms sound similar, one has power, the other doesn’t. In a nutshell, the difference between being “pre-approved” and “pre-qualified” is as follows:
A Mortgage Pre-qualification is a determination about whether the prospective applicant will most likely qualify for a loan within the lender’s current programs and indicates the amount of loan the buyer may be approved for. The pre-qualification is simply an estimate of your borrowing power so that you don’t waste your time shopping for homes that are out of your qualification price-point or your payment comfort zone.

A Mortgage Pre-approval is a much more formal process. Buyers will have completed a loan application, supplied their income data, W2’s, bank statements, and assets. The lender will also run your credit report and perhaps run the application through an automated underwriting process. With a pre-approval, your lender has done the work up front and can write your pre-approval with some certainty that you will qualify for a loan in a specific price range. For sellers presented with multiple offers, a buyer with a less secure pre-qualification letter may have their offer relegated to the bottom of the stack. Stronger offers get serious consideration so if the seller believes a buyer has gone through the trouble to spend time providing a good lender with the requisite information they know they are
a.) serious, and b.) the transaction is more likely to close smoothly.
Per the Federal Reserve’s definition, a mortgage pre-approval is a written commitment that’s issued by a lender following a comprehensive analysis of their overall creditworthiness. A pre-approval includes such factors as verification of income, verification of employment, available financial resources, as well as the evaluation of other areas typical of a credit evaluation process.

The loan will still have conditions to be met before it clears underwriting and funds for a purchase. Such as:
1. The identification by the buyers of a suitable property.
2. Continued creditworthiness, meaning there is no material change in the applicant’s credit score or debt-to-income ratio before closing (like… don’t go buy a car).
3. Additional terms and conditions may apply, things related to the transaction rather than the buyer. A clean title and acceptable title insurance binder is key and some types of loans require a home inspection, and of course, the appraisal.

The Pre-approval letter is about three steps closer to the underwriting process, and that makes your seller feel secure. As a Realtor, I work with both buyers and sellers. It’s in my client’s interest to get pre-approved with a reputable lender before we start the process… just like the “Big Girls” do. It’s not just a matter of being efficient with our time, it’s that in our super-heated Denver market, we may go power shopping on Saturday and need to get an offer in as soon as possible so as not to miss the window of opportunity. If your lender is skiing or spending the day on the golf course, it adds pressure trying to track him or her down. Submitting an offer without a lender letter weakens your position when your offer is on the table along with five others.

Realtors want to know that the buyer has taken the time to meet with a lender and has begun the process. Since nothing is certain in the real estate transaction, it’s good practice to mitigate unnecessary risk.

Neither pre-qualification or pre-approval letters are absolute, iron-clad loan commitments. Lenders and underwriters examine the file and circumstances can change from contract to close: buyer can lose their job, misrepresented something on the application (knowingly or not) or left out some pertinent information like a pending divorce. It is a fluid process.

Sitting down with a lender before you begin will help you time out your purchase. They will introduce you to the different options you have as a borrower, explain types of loans and work with you to find the program that works best for you. A lender meeting can also be helpful in finding any dings on your credit, reporting errors, or outstanding parking tickets that have gone to collections that you forgot all about. Planning your biggest purchase, your planning is key and though there are no guarantees, the process goes much more smoothly once you’re pre-approved.

Ruth Schoenherr is a mortgage broker who will help you find home loans in the Clearwater, Palm Harbor, Largo, Safety Harbor, St Petersburg and Tampa Bay area. For more information, go to her web site at www.ClearwaterMortgageBroker.net.

If you haven’t applied for a mortgage before, you may have a lot of questions. Where do I start? Do I go to a bank? Do I go on line? I have heard of mortgage brokers

What is a mortgage broker?

Think of a mortgage broker as a middleman between you and potential lenders. The broker’s job is to work on your behalf with several banks to find the best mortgage lenders who offer the most competitive terms and lowest rates that best fit your needs. People often use “mortgage broker” and “loan officer” interchangeably but they aren’t the same.

In general, mortgage brokers are licensed and regulated financial professionals who have a well-developed stable of lenders they work with. They do all the legwork — from gathering documents from you to pulling your credit history and verifying your income and employment — and use the information to apply for loans on your behalf with several lenders in a short time frame.

Once you settle on a loan and a lender that works best for you, your mortgage broker will collaborate with the bank’s underwriting department, the closing agent (usually the title company), and your real estate agent to keep the transaction running smoothly through closing day.

How does a mortgage broker get paid?

Like most sales professionals, mortgage brokers charge a commission for their services. So what makes loan officers different from mortgage brokers? Loan officers are employees of a lender and are paid a set salary (plus bonuses) for writing loans for that lender. Mortgage brokers, who work within a mortgage brokerage firm or independently, deal with many lenders and earn the bulk of their money via commissions.

What are the benefits of using a mortgage broker?

For starters, a mortgage broker acts as your personal loan concierge and does all the work for you. The broker applies for loans with different lenders on your behalf, finds the lowest mortgage rates, negotiates terms and makes the approval magic happen.

Most mortgage brokers have relationships with several local, regional and even national lenders, and they can tap those connections to get some loan fees waived for you. A mortgage broker will give you accessibility and one-on-one attention you likely won’t find when working directly with a loan officer at a large bank.

Another perk: Some banks and lenders work exclusively with brokers, and that positions you to get qualified for certain loan products if your mortgage broker has a good relationship with those lenders.

You’ll also save time by using a mortgage broker; it can take hours to apply for different loans, and then there’s the back-and-forth communication involved in underwriting the loan and ensuring the transaction stays on track. A mortgage broker can save you the hassle of managing all those daunting details.

Ruth Schoenherr is a mortgage broker who will help you find home loans in the Clearwater, Palm Harbor, Largo, Safety Harbor, St Petersburg and Tampa Bay area. For more information, go to her web site at www.ClearwaterMortgageBroker.net.

There is a shortage of homes for sale in the Clearwater Tampa Bay area. Quality homes are selling quickly, many on the first day they are listed. If you are shopping for a home, you need to be ready to move quickly. If a seller has multiple offers, for you to be competitive, you need to demonstrate that you can get the loan to buy the property.

What’s the difference between a prequalification letter and a preapproval letter?

Answer: While there are some legal distinctions, in practice a prequalification and preapproval refer to a letter from a lender that says the lender is generally willing to lend to you, up to a certain amount and based on certain assumptions.

There’s not a lot of difference between a prequalification letter and a preapproval letter. While there are some legal distinctions, in practice both terms refer to a letter from a lender that says the lender is generally willing to lend to you, up to a certain amount and based on certain assumptions. This letter helps you to make an offer on a home, because it gives the seller confidence that you will be able to get financing to buy their home. It is not a guaranteed loan offer.

Don’t worry about which word lenders use. Some lenders may use the word “prequalification,” while other lenders may call the letter a “preapproval.” In reality, lenders’ processes vary widely, and the words they use don’t tell you much about a particular lender’s process. The important thing is that the letter you receive provides enough information for sellers in your area to take it seriously. The best way to make sure that the letter you have will serve its purpose is to ask a local real estate agent.

Lenders usually check your credit when issuing a prequalification or preapproval letter. Many people wait to get a preapproval letter until they are ready to begin shopping seriously for a home. However, getting preapproved earlier in the process can be a good way to spot potential issues with your credit in time to correct them.

Ruth Schoenherr is a mortgage broker who will help you find home loans in the Clearwater, Palm Harbor, Largo, Safety Harbor, St Petersburg and Tampa Bay area. For more information, go to her web site at www.ClearwaterMortgageBroker.net.