Last week we went over the importance of working with a realtor and other professionals when purchasing a home. We also went over the first couple of steps in the process. Today, we will finish explaining the home buying process in an effort to help you realize it does not need to be a daunting or stressful time.

After you become pre-qualified for a mortgage, apply for one, and put an offer on a home, things are finally in motion! Someone will process your application and verify all documents for not only completion but accuracy as well. If any additional documentations are necessary, you will be made aware. Your loan officer will be intimate with you and the process. If you have any questions throughout it, they will be there to answer!

Once your application is completed, an underwriter will review all aspects in their entirety. They will also communicate with you throughout the process – as far as disclosures, employment, appraisal, etc. Once everything is completed and final, the loan will be sent to closing. Once you get there, you are almost to the end of the whole process! Exciting times ahead.

At this point, you are at your closing! This means some documents need to be signed by both parties and you are on your way to owning the new home! With the current climate of the world, things may be a little different when it comes to how many people can be in the closing room, masks, etc. You will be made aware of this before your appointment though.

As you can see, the process is not as scary as you may have originally anticipated. The best part of the whole process is that you are working with professionals who are there to give you advice, answer questions, and help you through the process.

With the increasing amount of new homeowners and others looking into the process, we wanted to remind you of the processes you have in store. If you are a first time buyer, the processes may seem a little intimidating, but we assure you that it is not. If you know what to expect, you might be less intimidated and stressed about the process.

First off, you will want to start off with getting pre-qualified for a mortgage. By getting pre-qualified, you will know what price range you can look into – including what your maximum monthly mortgage payment would be. This process is not only of no-cost, but also of no-commitment to any party. It is important to take this step so you can be realistic when looking into homes with your realtor. There are some people who do not want to go through the process with a realtor, but we highly suggest it. Your realtor will help you with the whole entire process and be there to answer any questions you might have.

Once you have looked through multiple homes and you have come to a decision, it is time to make an offer! One of the positives with having a realtor on your side is that you do not have to conduct any negotiations or deal with any contracts. Your realtor will handle that for you. Once the seller accepts the offer, you will know right away! You will receive not only the disclosure package, but also have the ability to start the application process. There are many financial documents and other documentation that is needed. Luckily with a professional on your side, they will help you with every step of the way. It might seem daunting at first, but if you break it up into little tasks, you will feel the anxiety wash away.

In an effort to not overwhelm you, we will finish with this process next week!

Forbearance mortgage options are available for mortgages during this strange time when many people are not currently working. This is something that is not automatic and you have to call your lender to not only find out the specific details of what is expect from you, but also to set it up. Because of the CARES Act, it is fairly easy to qualify for. It is very important to know what the terms are from your lender – how long it lasts, what is expected of you, etc.

There has been a significant increase of people not paying their mortgage. April 2020 has been the “largest single-month increase every recorded, and nearly three times the previous single-month record set back in late 2008” according to Black Knight. This is baffling some experts since qualifying for forbearance is not very difficult.

Depending your lender, the forbearance options may vary. One forbearance option is that the lender accepts decreased payments for a number of months. Another option is skipping payments all together for a number of months and adding on those missed months to the end of your loan. No matter which option you choose, please remember that you will be responsible for paying the skipped or reduced payments. What you owe will not be erased.

You should also familiarize yourself with the CARES Act and how it pertains to you and your immediate situation. There are certain lenders (Fannie Mae, Freddie Mac, and a few others) where foreclosure cannot occur on your home for up to 12 months. The CARES Act does not apply to all lenders, though. Since this protection is temporary, not permanent, it is important to know where you stand with your lender.

It is recommended that you reach out to your lender as soon as possible if you are unable to pay your mortgage due to financial hardship from the virus. It is not a complicated task. Simply call your lender and they will be able to assist you!

Have you ever thought about trying to negotiate your mortgage rate? Most people think that the rate is set in stone. And for the most part, it is. But on average, buyers save $1,500 by obtaining one more quote. When obtaining five quotes, buyers are saving an average of $3,000! It is worth it to take the time to get rates from a handful of different companies. You not only will have some negotiation leverage, but you will also see if you are getting a fair deal or not.

It is important to make sure that you have a good credit score if you are going to try to negotiate. The lender will not want to think they are risking anything with loaning you money. It will also be helpful if you have at least one less expensive quote when negotiating. If you have a less expensive rate, you can ask the lender you want to work with if they can match the less expensive rate. You also have the opportunity to negotiate with discount points. This means you will pay more initially but you will have a lower mortgage rate over time. Discount points do have to be purchased but in the long run, you will likely save thousands of dollars.

If you are in the beginning of your search, a strong mortgage application will give you more power to negotiate. As already mentioned, a higher credit score and a bigger down payment will help. Having lower monthly debts will also help greatly as well.

There are a lot of regulations with mortgages but there is some flexibility that is available. There are some lenders that have more wiggle room than others. For instance, a lender that operates at a lower operating cost will have more wiggle room to play with than someone who has a brick and mortar location and many expenses.

Know what you are bringing to the table and be confident with that when you are in the negotiation stage!

It may sound silly and redundant to say but we all know that homes can be expensive. If you are a first time homeowner or in the process of selling your current home and upgrading to a different one, it is important to know how much of a budget you are working with.

There are a number of financial aspects to keep in mind. Two of the main factors are your down payment and the total monthly cost of your new mortgage. Although this may be common sense, remember that if you put down a bigger down payment, the amount of your loan in its entirety will be lower. (If a down payment is not something you can afford, there are some options available for either very low or no down payment.)

A very popular opinion as to how much you should spend on your home is that the total monthly cost of your mortgage should not be more than 28% of your monthly income, before tax. There are some experts out there who recommend lower or even higher – but this is a great goal to start at. There are many factors that equal out to the total monthly cost of your home. If you are not completely sure what your cost will be, ask your real estate agent or mortgage broker for help!

We are always here to help. We can help you figure out what you can afford, along with making you aware of all the different programs out there that are available to you.

With everything that is going on, we realize that you may be stuck in a weird place if you are in the market for a new home. With the vast majority of people wanting to keep things contactless, real estate agents have had to adapt. The majority of them have done a great job – with more and more live-stream house tours being readily available. There are some agents who are still offering in-person showings but precautions are amplified with increased time between clients and a limited amount of people in the home at one time.

On a similar train of thought, home inspections still have to take place as well! In most situations, it is now procedure for the home inspector to be the only one allowed in the home. Because of this, home inspectors should be taking photographs and/or video of what they are doing and sending it to the clients. If this is something that you are dealing with, it is okay for you to request it be done.

Once it is time to close on the house and proceed in that manner, the majority of realtors are not being allowed to be in this meeting like they were accustomed to in the past. All parties who are part of the process are signing documents at different times since they cannot all be in the same room together.

You can ease your mind with knowing that due to the technology we have today, you will still be able to purchase your dream home! The process may look a little different but it is still possible!

First off, please keep in mind that forbearance does not mean you do not have to pay anything back or that what you owe is completely forgiven. You will have to pay everything back but you may be able to suspend or reduce your mortgage payment for a limited time. There are many different forbearance programs available so please be sure you know the ins and outs of the one you are agreeing to. Also, as soon as you are receiving income again, it is recommended that you reach out to your mortgage company promptly so you can resume making your payments. This will ensure that whatever the terms are to your agreement are met promptly instead of them being prolonged.

Some forbearance programs expect you to pay back the full amount you suspended all at one time while others do not expect that. Other options included the missed payments being spread out over many months or even additional payments being added to the end of your mortgage term.

If you are affected negatively from the virus and are not making any money, you can request forbearance for up to 180 days. (Please note that this is a perk of owning your own home! In most cases, this is not an option if you are renting.) After those 180 days, it is possible for you to can extend it another 180 but you must contact your loan servicer directly.

Also, with the CARES Act, beginning March 18, 2020 your lender is not allowed to foreclose on your home. Again, another perk of owning your own home.

There are certain states that are offering other mortgage relief options. Take a look at your state’s government website to see what might be available to you.

One piece of advice we do wish to share with you is to make sure you have these types of agreements in writing. Do not go by what someone verbally tells you. It is very important that you are clear and have in writing the terms of what you are agreeing to and what will be expected of you.

With most people spend many, many hours at home nowadays, we thought we would share with you some projects that help improve your home and bring you some happiness! If you have kids, they may even be able to help with some of these projects – which would give them something to do! (From what we know about kids in this time, this would certainly be a plus!)

To start with, why don’t you start organizing? Organizing is what most people put off until it absolutely has to be done. Once you get rid of clutter, you will see what a better mood you are in, too. I will admit that my bedroom closet tends to get a little out of control. If yours does too, start there! Then you can hit your kitchen drawers (we all have a junk drawer!), office, linen closets, and laundry room. If it seems to be too much for you, start with one area a day!

An indoor (or outdoor) garden is something that the kids can help you with! You can use all kinds of fun containers, too – like, empty whipping cream containers, etc. The world is your oyster! You could plant herbs, vegetables, fruits, or even flowers! If you start with seeds, this would be a great lesson for the kids.

So this next idea may seem a little simple but it could make the world of difference! Are you ready? Rearrange your furniture! This could be in your bedroom, the kids’ bedrooms, or even the living room. You could always redecorate while you’re at it too! Change out photos in frames, especially if they are old.

If you have an old paint left and you do not want to go to the store, you could also spruce up your paint! This is something that will be great for your home anyway.

Are there any other ideas you have to add to this list?

Like we mentioned last week, anything can happen…especially while things are changing at such a rapid pace. Anything is possible! At this moment in time, it is hard to tell if there will be a housing crisis or not. There are many people who say that it is likely that the housing market is affected negatively due to the virus and the economic downfall.

What has already happened are listing prices decreasing and some listings taken off the market all together. Not as many applications are also being done as well – especially in major cities. We also discussed last week that amount of mortgages that have gone into forbearance – it has increased by 1,000%! The less people are working, the more this will likely happen.

Some real estate agents have claimed that this is similar to what went on in the early 2000s. What we are currently facing has to do with the fact that most homeowners are not making the kind of money they were. If it is temporary and there is an end in sight, things will get better. But we are still at a point where no one knows what the future is going to bring. The inability to pay is different than what happened in the early 2000s. That had to do with issues with financing.

Since we are based out of Florida, we wanted to make mention that half of the fifty of the most vulnerable counties are located in Florida and New Jersey. Ten of these counties are located in central and north Florida. Flagler County is actually included on this list. It is possible that these are potential foreclosure hotspots.

While there is nothing that can really be done at the moment it is good to be aware of what is going on around you. (Or potentially going on around you.) Lets hope that if it gets bad in our county that somehow things will be able to bounce back quickly!

It may be a little too early to give a solid number at the moment but it is estimated that anywhere between two million and 12.5 million homeowners may be requesting a forbearance on their mortgage due to the virus. If you are out of a job and this might be something you want to consider, we suggest you call your mortgage provider or loan servicer right away to find out what the details are and if there is some sort of deadline.

Initially, the number of home loans in forbearance was at 0.25%. It is now up to 2.66%. That is a pretty significant difference…in just one month! That means it increased by 964%! That is pretty wild and unheard of.

If you do need forbearance, be patient! When you make the phone call, your hold time is going to be much higher than normal. About a month ago, hold time was about two minutes. It is estimated now that hold time is almost eighteen minutes. In the beginning of March, about 5% of people hung up without getting help. That number has now increased to 25%. So we want to remind you to be patient and be nice to whoever is on the other side of the phone. They are trying to help you and it is not their fault…call volume has drastically increased.

As time goes on and money becomes even more of an issue, with so many people not working, it is estimated that these numbers will all increase as well. It is to be expected in the economic climate we are currently in.

If you feel like you will need to call with this request, we recommend that you take notes and ask a lot of questions. We want you to understand everything that will be required of you when you are out of it and what it all means.