Recently remodeled 3 bedroom, 2 bath home in great Mountain Home location near the base. Move in ready, with new kitchen counters and tile back splash, newer exterior paint, roof, sprinkler system. Nice wood burning fireplace in living room. Large fully fenced back yard complete with dog run, gardening area, and a beautiful 28X14 redwood deck. RV parking. 220 outlet in garage. All of this for $94,900!

Not a short sale or bank owned property, can close quickly!

Move in ready! Bright and open 3 bedroom 2 and a half bath, two story home in desirable Creekwood Subdivision in South Boise. Vaulted ceilings, plant shelves, breakfast bar, living and family rooms! Property backs up to vacant land which is proposed to be an 80 acre City Park. Low maintenance landscaping with fully fenced yard. One year home warranty included with an acceptable offer. Not a short sale or bank owned property, can close quickly! $137,900

Interest rates are at historic lows and will not remain this low forever. In fact, I’ve heard predictions rates will more than likely rise rather than go significantly lower. At the level rates are now, your payment will be minimally affected if they were to drop any lower.

Home prices, on the other hand, are slowly increasing, especially if you’re looking for a home under $150,000. Our inventory in Ada County continues to remain low, and homes in the lower price ranges are going for asking price if not more.

Yes, you can still snatch up a great foreclosure property at a great price, but be forewarned you will not be the only one wanting the same property. It may even sell for well over asking price! I have seen a lot of investors buying these properties for cash, which is pushing a lot of financed buyers out.

If you are still debating whether or not you should wait or buy now, my advice to you is buy now. I believe the window of opportunity is narrowing and before long interest rates will be rising. Remember back when home prices were at their highest?  If you had known then there was going to be a housing crash, wouldn’t you have sold your property when you could have for top dollar?  Well of course you would have! However, most of us didn’t realize a crash was coming.

My point is, if you are sitting on the fence waiting for home prices and interest rates to be at rock bottom, you may be making essentially the same type of mistake many of us made thinking home prices would keep going up.

Let’s say you currently can afford a $200,000 home with the interest rate at 4%. Well, if you wait around and interest rates happen to go up to 5%, you have lost affordability of a home by 25%. You can no longer buy a $200,000 home;  you will be looking at a $175,000 home instead. That is a huge buying power difference most of us don’t realize we may lose!

Some buyers might wonder whether they are better off continuing to rent or if now is a good time to buy. Researchers point to what they term the “hurdle rate . . . the point of equilibrium between renting and buying where it’s a wash in terms of wealth building.” If you find yourself thinking you might want to make the leap from renting property to owning your home, check out this article at Speaking of Real Estate.

With inventory levels at an all time low, the Boise and Meridian area is seeing a shortage of homes on the market. Now is the time to get off the fence and purchase a home, or you may miss out on a great price and exceptionally low interest rates.

Boise’s economy comeback means fewer houses have flooded the market and prices for existing homes may be starting to rise.

money.cnn.com/galleries/2012/real_estate/1201/gallery.turnaround-housing-markets/6.html

It is harder then ever to get a mortgage today. Lenders look at everything and will question anything. One key point to keep in mind is to make sure all the funds in your accounts are “source-able.” By this I mean you cannot have mysterious deposits into your account with no documentation as to where they came from or how you received them. You must have pay stubs, receipts, etc., or the lender will not count this money as source-able or include it as funds toward your closing costs. During the time your loan is being processed and you’re waiting to close on your new home, do not go out and spend a large amount of money on anything. Do not buy a new car, get a loan for new furniture, deposit money into your account with no records available as to where you acquired the money. Buy only necessities during this time. Everything else can wait.

Simple credit tips to boost your score:

• Have a variety of credit such as an installment account, revolving credit, credit cards (a few, not a lot!).
• Do not borrow more then 30% of your credit limit on credit cards.
• Charge small amounts to your credit cards, but pay them off in full at the end of each month. Keeping an account inactive for 3 or more months can bring down your score.
• Do not close out old accounts, even if you do not use them. This will affect your length of credit history, and can hurt your overall FICO score.

Keep in mind that a few days before closing on your new home, your lender will ask you for your latest bank statements, pull your credit report again, and verify your employment. If anything has changed, you could end up being denied financing and lose out of your new home.

Next week: What you can do to help your home sell faster.

Most buyers do not realize there is a difference between a pre-qualification and pre-approval. I feel this is due to lack of knowledge and communication from the lender and buyer’s agent.

Make sure you get pre-approved, versus pre-qualified. Yes, there is a difference. A BIG difference. Pre-qualified simply means the lender goes over the information you have provided (usually over the phone) such as work history, yearly income, debt, and tells you whether or not they think you can get a loan. It does not guarantee you can get a loan, however.

You must be pre-approved before you start looking for a home. Pre-approval is a more in-depth look at your past, which includes pulling a credit report, filling out an application, and affirming whether or not a lender will give you a loan. Once you are pre-approved, you can go look for a home. After you find your perfect home and have reached agreement with the seller on price, terms, etc., this information will be forwarded on to your lender (usually by your agent). After a successful appraisal for the property, the lender will give you a loan commitment letter that assures you will get the loan.

If you have anything in your past that may hinder you securing a loan, make sure you ask the loan officer to send your file to underwriting before they give you a lender approval letter. I cannot stress this enough. This will help all parties, including you, know that you can close on the loan. There is nothing worse then finding a property you love, go through the process and only then are told you cannot get the funding. Sometimes even buyers who get pre-approved may have blemishes in the credit history that can arise to keep them from ultimately closing on a loan.

Buying a home should be an enjoyable and memorable experience. By working with an experienced real estate agent and lender, the process should be smooth. A lot of  hard work goes on behind the scenes with the buyer’s agent, selling agent, and lender that most buyers and sellers never see. Just remember to always ask questions if you are confused or unsure about the process. Keep excellent records of your incoming and outgoing funds. Be honest and truthful to your agent and lender, and you should have a positive experience when you buy your new home.

Next week: Credit tips while waiting to purchase a home and ensure you get lending

I cannot stress enough to buyers in this market to make sure they have a good lender and to fully educate themselves with what is required of them during the process. In the past year I have seen and heard many (too many) deals fall through due to the buyer’s financing not meeting the strict requirements of lenders. Also, even after the process has begun, many buyers make poor financial decisions after they make an offer on a home and while they are waiting for the financial part to be finished. In turn they get denied the loan by the lender just prior the the sale being closed.

Although a buyer’s agent has virtually no control over lenders’ decisions, an agent works with lenders on a continual basis and generally has established a good rapport and trust with several different lenders. Choosing a lender can be the difference between having a successful purchase of a home or not getting one at all. If your real estate agent is suggesting you use a specific agent it is not because your agent gets “perks” for using that specific lender, it is because the agent has had first hand experience with that lender and has more then likely had numerous successful transactions. I usually refer my clients to three lenders—lenders whom I feel are the best in the valley due to their competency, reputation, ethics, integrity, and knowledge in the lending industry.

If you are planning on purchasing a home, find a reputable and knowledgeable agent who can assist you with not only finding your home but helping you find a lender you are comfortable with. Be sure to ask questions of both your agent and lender about how to make the purchase of your new home a pleasant experience.

Confused about pre-qualification versus pre-approval?