Archive for the ‘ Mortgages ’ Category

What Costs to Expect When Selling Your Home


Just as with buying a home, selling also comes with its share of dues. You need to prepare your home for prospective buyers as well as pay part of the closing costs, which average around 3% of the home price. Here’s a breakdown of the types of costs you can expect.

Home repairs and inspections: Before the sale, you’ll probably want to fix up carpet stains, window cracks or other home features that have suffered minor damage over time. You also might decide to pay for an inspection for termites or other pests to avoid any unpleasant experience for prospective buyers checking the home.

Staging: To impress buyers, hiring a professional home decorator or stager can help you organize and make your home more appealing. You might also get higher bids on the home this way.

Settlement company fees: If you decide to use a third-party settlement company to ensure all documents and procedures between you and the buyer are correct, you pay the company for your portion of the closing costs and potentially an administrative cost. In return, the company will pay off your mortgage and those closing fees to the lender.

Real estate commission: Generally, you have to pay for the real estate fees for both your agent and the buyer’s agent. The cost can be negotiated, but it typically ranges between 5% and 7% of the home price, split between agents. The money goes to the agents’ brokerages, who will then pay them. This commission can be one of your biggest expenses.

Attorney fees: Lawyers can be certified as real property specialists and in some states might be required to help close a home sale.

Property taxes: Ideally, the buyer and seller pay their respective shares of the property taxes for when they lived in the home that year. Depending on when you sell, you might pay all taxes for that year and have the buyer reimburse you for the time he started living there. Additionally, if your home increased in value more than a certain amount, you might have to pay a capital gains tax.

Seller’s concession: If the buyer is having trouble paying for some of the closing costs, the seller can agree to pay a percentage of them. In exchange, that amount can be added into the home price the buyer pays.

Title search: Although the title search is generally the buyer’s responsibility, you might decide to pay for it as part of the deal. The title search involves a professional reviewing public records to confirm you own the property that you’re selling and that no unpaid dues interfere with your title of ownership.

Lien releases: From the title search, you might discover that some debt hasn’t been paid. If you owe any taxes, contractor costs, utilities or other bills on your home, you’ll receive a lien, or a record of any unpaid amount on your home. You must pay it off to clear your title and be able to sell your home.

Owner’s title insurance: If the title search misses something, a lien remains unpaid or the seller doesn’t actually own the property, this insurance protects the buyer from any financial loss. The seller generally pays for this.

Home warranty: As part of the negotiation with the buyer, you might decide to pay for a one-year protection plan on the buyer’s behalf. This will cover certain repair costs if needed. Knowing the possible costs when selling your home can keep the process straightforward. Despite being potentially expensive and time-consuming, selling at a good price and without complications can save you time and energy.

Source: NerdWallet, Inc.


Members 1st is here to help you through all of life’s most important moments and milestones. For more information about buying a home, visit our Mortgage Services website.

How to Tell You’re Ready to Buy a House


Making the decision to become a homeowner is emotionally and financially complex. Here are some key things to ask yourself if you’re considering whether buying is right for you.

Do you have a good reason to buy?

Sometimes switching from renting to buying is a no-brainer.  Maybe you live in a modern one-bedroom apartment in a chic part of town, but you have a baby on the way. If you want a place in a good school district, with more square footage and a yard, buying may well be your best bet.

Other times, the urge to buy is driven by emotion: You see a house you like and you “just know.” There’s nothing wrong with that reaction, but take time to check out the property before you make any commitments. If it’s too far from work, near a noisy road or the best house on a bad block, it may not be as good a deal as it first appears.

And remember: Houses go on the market all the time, and there are tens of millions of single-family homes and condos in the U.S., so there’s no need to worry if your first choice doesn’t work out; your home is out there.

Can you make the upfront investment?

Buying a home requires an initial investment that you can’t ignore.

First, many lenders require a down payment of 20% of the home price. That’s $54,000 for a home that costs $270,000, about the median price in America. You’ll also owe closing costs, which could include loan-origination fees, discount points, appraisal fees, survey fees, underwriting fees, title search fees, and title insurance. Those could total another few thousand dollars.

The expenses don’t end there. You’ll want to hire an independent inspector to look for defects in a home before you buy.  This will cost several hundred dollars, but could save you thousands in repairs. And then there are moving costs, state or city taxes, utilities installation and the costs of changes you might want to make to the home — such as new flooring or painting — that are easiest to do while it’s empty.

This isn’t meant to scare you off; buying a home is still a smart choice for many people, despite the costs. But it does take a lot of cash.

Can you afford the upkeep?

Your mortgage payment might be fixed for the next 30 years, but your property taxes and insurance rates can rise. And if you didn’t make a 20% down payment, you’ll have to buy private mortgage insurance, or PMI, until you have 20% equity in your home.

Once you’re a homeowner, you’ll also have to pay certain utility bills that might have been included in your rent. And you’ll be responsible for maintenance: double-pane windows one year, a new garage door the next, fixes to the roof five years up the road. It adds up.

These numbers are based on averages.  Plug your specific figures into a rent-or-buy calculator to find out if you’re ready for home-ownership. And know that there is no one answer that’s right for everybody. Whether you keep renting or buy, your decision should be right for you alone.

Source: NerdWallet, Inc.


Members 1st is here to help you through all of life’s most important moments and milestones. For more information about buying a home, visit our Mortgage Services website.

4 Things to Do Before Buying a Home


As exciting as it is to buy a home, the lead-up can be a dizzying experience, especially for first-time buyers. But don’t fret. Breaking down the process into smaller steps can help ease your anxieties. Here’s a look at the kinds of questions you’ll want to ask yourself, as well as a few other practical tips.

Judge readiness for responsibility

Although the thought of home-ownership is generally a pleasant one, the reality can be much more stressful. That’s why it’s crucial to ask yourself whether you’re really ready for the hassles of buying and owning a home. Gone will be the days when you could simply call the landlord to fix a leaky faucet. Those chores will become your responsibility once you own your castle.

You’ll also want to think about how long you plan on living in the home you’re interested in, which will help determine the best mortgage for you. A fixed rate loan offers predictability: Once you take out your mortgage, your monthly payment will not change until you pay off the loan or refinance. An adjustable rate mortgage typically offers a lower starting interest rate if you plan to sell in a few years.

Determine what you can afford

Use a mortgage calculator to figure out how much home you can afford. It’s one of the most important steps to take. To start, think about your down payment, as well as the transaction costs. Although experts recommend having 20% of the price for a down payment, you may be able to put down as little as 3%, assuming your credit score is good and you’re willing to accept a higher interest rate and pay for private mortgage insurance, or PMI. To give you a better sense of what you might owe, consider that the median sales price of an existing home was about $270,000 in 2018. So 20% down amounts to $54,000.

Don’t forget the transaction costs, which can amount to 5% of the price, to cover things such as appraisal, title search and lawyer’s fees. When coming up with a home-ownership budget, factor in the monthly mortgage payment, maintenance costs and energy bills.

Clean up your credit

If you’re applying for a mortgage, you’ll want to clean up your credit to get the best possible interest rate on your loan. To lock in the best ones, shoot for a credit score of 700 or above. Over the course of a 30-year mortgage, higher rates stemming from a low rating when you borrowed can cost you thousands of extra dollars.

For starters, reduce your debt as much as possible. That includes slashing your credit card debt as well as any remaining student loans. To see what else needs fixing, order a copy of your credit report.

Stick with your current job

Financial planners agree that people should spend 28% or less of their gross monthly income on housing payments. The key to that, of course, is having a job. If you’re in between work, lenders are likely to view you as a greater risk when it comes to making mortgage payments. As such, the months leading up to purchasing a home are definitely not the time to make a sudden job or career change.

There’s little denying that the process of buying a home can be stressful. In fact, that may serve as good preparation for some of the hassles related to actually owning a home. In both cases, though, the benefits of home-ownership tend to outweigh the occasional headaches.

Source: NerdWallet, Inc.


Members 1st is here to help you through all of life’s most important moments and milestones. For more information about buying a home, visit our Mortgage Services website.

Is Fall the Best Time to Buy a House?


Sometimes it’s smarter to buy certain items according to the season, like sweaters near the end of winter and swimsuits in late summer. But what’s the best season for buying a house?

The answer: the fall. As temperatures cool and trees shed their leaves, enough factors break in the buyer’s favor to make it the No. 1 season for home-buying. Here’s why.

Less competition

Many home-buyers are families who want to minimize a move’s effect on their kids’ schooling. They want them to start at a new school on the first day, not midyear. And so if their spring and summer searching didn’t work out, they might well wait for the next go-round. This means fewer buyers bidding on the same houses you’re interested in and more negotiating power when you do.

Of course, this works both ways: Sellers might not want to uproot their families in the middle of the school year either. But while this brings housing inventory down, you might just find it easier to focus and pinpoint exactly what you really want in a home.

Sellers are more motivated

Spring and summer are the high seasons for home-buying: Days are longer, the weather’s nice, and open houses are well-attended. And that means sellers can sit back and be a bit choosier with offers.

But as Labor Day recedes in the rear-view mirror, sellers start to wriggle in their seats. The prospect of trying to sell during the holiday season or, more likely, waiting until the next year, is dispiriting. And so these sellers can become, in a sense, settlers — willing to reduce their prices and conditions. There is some variation by region, but overall in the U.S., prices have peaked by the end of August.

Buyers can use this increased motivation to their advantage, offering less and asking for more during negotiations.

Taxes and discounts

Buying a home costs a lot of money but comes with good tax breaks as well. The IRS allows deductions for the interest you pay on your mortgage, on the premiums you might pay for mortgage insurance, on property taxes and more, including some of these that went into your closing costs. Buying a home in the fall means seeing those tax breaks sooner, the following April.

Also, much like those motivated sellers, many homebuilders discount their inventories during this time of year to help them meet year-end sales goals.

The decision to buy requires serious consideration of where you are in life, what your goals are and how much you can afford. But if you are indeed ready, buying during the fall can be a good call. Just try to find time in between football games.

Source: NerdWallet, Inc.


Members 1st is here to help you through all of life’s most important moments and milestones. For more information about buying a home, visit our Mortgage Services website.

10 Tips to Get a Home Ready for Sale


Preparing to sell your home can be difficult. You have to create enough ambiance so that buyers can envision themselves living there but make sure it’s not so cluttered that all they see is you. Make some changes inside and out to get top dollar for your abode.

  1. Do a drive by. If a person sees trash on the lawn or overgrown weeds, they won’t be enticed to come inside. Boost your home’s curb appeal by planting a few colorful flowers at the entrance and mow the lawn.
  2. Declutter. Most people are familiar with the deceptive clean-up strategy of stuffing all the mess under the bed or in a closet. Count on potential buyers checking closets and cupboards, and make sure they are tidy and organized.
  3. Lighten up.  Open up the blinds to allow as much natural light as possible. Consider adding extra lamps that can be dimmed for ambiance.
  4. Add accents. You don’t have to do a major renovation to make your home more appealing. Little accents such as new sink hardware and cupboard knobs can make a big difference. If you opt for a bigger project, make sure it will add value instead of detracting from it.
  5. Neutralize. While you may love a bright orange living room, it could be too much for a potential buyer. Neutralize the color scheme by painting walls white and covering up any brightly colored furniture.
  6. Put up mirrors. Replace bold artwork with mirrors to make a room look bigger and lighter. As potential buyers walk through the house, they can catch glimpses of themselves, helping them envision themselves in the home.
  7. Aromatherapy. No need to buy fancy candles or incense. On the day of a showing, simply place a couple of tablespoons of vanilla extract or other essential oil in the oven at 300 degrees. Within minutes, the home will be filled with a beautiful aroma.
  8. Feng shui. As potential buyers walk through the home, it should flow nicely. They shouldn’t be bumping into furniture. Ensure each room is spacious and has a clear purpose. If you have a room that’s an office/guest room/crafting trifecta, decide which role works best and then rearrange it for that purpose.
  9. Beautify the bathroom. Transform a bathroom into a spa. Fresh linens, bath mats and candles can make all the difference. Put the toilet seat down, and you can even fold the final sheet of the toilet paper into a fancy triangle.
  10.  Clean. Last, but not least, ensure that your house is clean for showings. Don’t forget to scrub the baseboards, remove the shower scum and dust. Consider getting carpets steam-cleaned as well.

Try walking through your home, pretending to be a potential buyer, to see what needs fixing, and then tackle those details. With a few repairs, the house will be ready for showing in no time.

Source: NerdWallet, Inc.


Members 1st is here to help you through all of life’s most important moments and milestones. For more information about buying a home, visit our Mortgage Services website.

The Cost of Raising a Child From Cradle to Adulthood


Raising a child takes patience, understanding — and about $245,340, based on the latest estimates from the U.S. Department of Agriculture.

That’s the average cost to care for a child from birth to age 18 for a middle-income family, as calculated by the USDA in a recent report on family expenditures. The estimate excludes prenatal health care and college costs.

If you’re getting ready to have your first child, your life and your spending will change drastically. Here’s a closer look at how the cost breaks down.

Housing

Child-rearing expenses typically cost couples with two children between just over $9,000 and nearly $26,000 a year per child, depending on household income and the age of the children, according to the USDA.

The incremental cost of housing is the largest expenditure, accounting for about 30% of the cost of raising a child to adulthood, the report says. That estimate is based on the expectation that a family with children will need at least one extra bedroom. And the estimate of housing costs is conservative, the USDA says, because it does not take into consideration the desire of many parents to live in areas with better schools, for example, which tend to be more expensive.

To prepare for buying a home, you will want to have around 20% of the purchase price saved up for a down payment, although lenders do make exceptions. Consult your credit union for help with mortgage qualification.

Child care and education

The cost burden of child care and education has ballooned since 1960, when it accounted for only 2% of the typical costs of raising a child, to 18% today, according to the USDA report. That is largely due to women’s increased participation in the workforce.

To offset the cost, look into benefits such as the federal Child and Dependent Care Credit, which can reduce your taxes by up to $1,050 a year for a single child and $2,100 for two or more. Also look into alternatives to day care centers such as sharing a nanny with another family or hiring a live-in “au pair.”

If your child goes the private school route, be prepared. The average cost for private elementary school nationwide in 2014-15 was $7,331, and the average cost for private high school was almost twice that, according to PrivateSchoolReview.

For higher education, considering opening a 529 account for your child, which allows you to save for college costs with tax-free earnings and virtually no contribution limits. A Coverdell account can help you build savings for private school or college, although the benefits are more limited.

Food

As your child gets older, grocery bills will increase. Food accounts for 16% of child-rearing expenses, the USDA report says. This includes grocery shopping, dining out and school meals. To save money on food, eat as many homemade meals as you can; it’s considerably cheaper than dining out.

Health care

Your child inevitably will get sick, and even if you have insurance, it won’t cover all the costs. Out-of-pocket expenses for medical and dental services tend to rise as your children grow. Out-of-pocket health care expenses account for about 8% of the cost of raising a child in a typical household, the USDA figures. To save money, look into a health savings account or flexible spending plan, which allow you to pay for qualified health care expenses with pretax income.

Bringing a new life into the world comes with a spectrum of challenges and expenses, so be prepared with new strategies for saving money and building assets. As exciting as parenthood can be, it helps to be ready for it financially, too.

Source: NerdWallet, Inc.


Members 1st is here to help you through all of life’s most important moments and milestones. If you have any questions, please call customer service at (800) 237-7288, visit our website, or visit one of our various branch locations.

How to Choose a Real Estate Agent


As you start on the path of finding a home, having a real estate agent guide you in the process can make a difference. About 98% of buyers who used agents viewed them as a helpful source of information, according to a recent report from the National Association of Realtors, or NAR. Because an agent can help determine how much you pay for your new abode, it’s important to find one who is right for you.

Seek referrals and research associations

Start your search by asking friends and family members for recommendations. In this way, someone you trust can verify how effective and helpful the agent was.

You can also make a list of agents who sell homes in your price range and in areas where you’re looking to buy by checking online and through trusted real estate associations. Some have specialties and only work with certain clients such as first-time buyers or those looking for luxury homes. Also check for Realtors, or real estate agents who are NAR members. They follow a code of ethics in working with clients.

You can also check whether any of the agents have expired or suspended licenses by looking them up on state regulatory agency websites.

Ask the right questions

When you have a list of candidates, start interviewing agents. Consider asking them the following:

  • How long have you been in the real estate business in this area?
  • What credentials do you have?

You’ll want to find someone who has experience in your area and determine their specialties, if any. Some possible credentials include Accredited Buyer Representative (ABR) or Certified Buyer Representative (CBR), which means they have met specific qualifications and passed exams to represent a buyer at every stage of the process.

  • How many clients do you currently have?
  • Will you represent just me, or a seller, too?
  • Do you work part time or full time?

These questions can help you determine how reachable and invested an agent might be in helping you. A buyer’s agent negotiates strictly for you in a deal, as opposed to a typical real estate agent who may represent the seller, too.

  • How would you help me find a home?
  • How much do you charge?

These two responses can let you know how the agents work, what sources they use and whether there are any costs involved. A buyer’s agent typically splits the home sale commission with the listing agent, with the seller usually paying the cost of the commission. Buyers typically pay nothing for the service directly.

By the end of the conversation, you’ll want to know if you can trust this person. When agents start recommending other professionals, including lenders, you need to be able to trust those judgments.

Check their references

During the interviews, ask agents for the contact information of some of their former clients. Call these people and ask open-ended questions such as whether there was anything that the agent could’ve done better or what factors made them choose this agent. You may be able to glean some insights from them as you make your final choice.

As you select your real estate agent, remember that you don’t have to stay with the first one you choose if things don’t work out. You want the right guide to help you find the home that works for you.

Source: NerdWallet, Inc.


Whether you are buying your first home, a vacation home, are relocating or looking to refinance your existing mortgage, Members 1st has a mortgage program tailored to your needs. For more information visit our Mortgage Services web page.

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