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Copyright 2012 NATIONAL ASSOCIATION OF REALTORS®

Real Estate Corner…


       Q.     How Much Can I Afford To Pay For A New Home?


       A.     When you’re interested in purchasing a home, the mortgage company or your REALTOR® will usually determine the amount you can afford by using one of two formulas. 



      The Payment to Income Ratio is a fairly simple formula.  It adds your future mortgage payment, property taxes and insurance together to get what is called a “PITI” payment.  This amount is divided by your total household income to produce a percentage.  Most loan companies consider anything under 28 percent an acceptable ratio and the loan is granted. 



      The Debt to Income Ratio is not as simple.  It not only adds the PITI payment, but all monthly payments.  This includes auto loans, credit card payments, investment payments, and other fixed monthly bills.  The acceptable percentage using this method is usually higher than the standard 28 percent, but varies by lender. 



      The easiest way to figure out what you can afford is to figure out your Payment to Income Ratio using a monthly payment that produces a final percentage slightly under 28 percent of your income.  Then using a loan amortization chart, which can be obtained from your REALTOR®, you can identify the appropriate price range for your future home.  Of course, the overall price range is also affected by the amount of your down payment, current interest rates, and the term of the loan. 



      Most REALTORS® work with mortgage companies and offer professional consultation to help you determine how much you are qualified to purchase. 


If you are considering buying a home in the near future,
are looking for competent and caring representation,
please call me at 405-820-1740.


Clutter



Once your home is on the market, it is, for all practical purposes, no longer your own. It’s important to de-personalize your space so prospective buyers can picture themselves in the home and not be distracted by your belongings.


Pack up personal photo frames, trophies, knick-knacks, books and your personal decorations like children’s artwork and team posters. The goal is to strike a balance of inviting and uncluttered. If you wouldn’t find it in a model home, go ahead and pack it up.


Remember, less is more. Get rid of extra magazines, candies, refrigerator magnets, blankets thrown over the couch, and any other items that are temporary decorations.


If you want to clear away the clutter and get honest, reliable advice on today’s housing market, call me. I specialize in marketing & staging homes and I welcome the opportunity to handle all your real estate needs.


Web: www:RhondasRealEstate.com

Cell: 405-820-1740

Real Estate Corner…


      Q.    We Are Considering Purchasing A Home And Are Uneasy About The Negotiation Process.  Can You Help?

       A.     The goal of a positive real estate negotiation is to result in a win-win agreement.  This is an agreement where both the seller and buyer feel they have received an equitable deal. 


      Here are a few simple tips to help ensure that you negotiate fairly. 


  • First, make sure that you offer a fair price.  Nothing turns a seller off faster than a “low-ball” offer.  Likewise, don’t get into negotiations on a grossly overpriced home.  This can leave you feeling taken advantage of and exhausted.  Both the asking price and your offer should be based on current and factual comparable sales in the area. 
 

  • Second, always respect the priorities of your counterpart.  Try to identify the other side’s motivations.  Then, examine your own.  If some items prove to be a sticking point in negotiations, offer to meet half way.  This may require you to pay half of some expenses or modify your closing date, but in the end you will feel as if you have fairly compromised.  If you have addendums to your main agreement, it may be helpful to solidify the purchase agreement and then deal with the addendums later.


  • Finally, using a third party on your behalf will keep you focused and emotionally disconnected—resulting in a much better outcome.  Look for a CNE ~ Certified Negotiation Expert. I’ve made the art of successful negotiation the cornerstone of my business.  I work hard to understand the needs of both the seller and the buyer in the transaction, and can put these years of experience to work for you. 

If you are thinking of selling or buying soon,
be sure to interview your Real Estate Professional...
how do they overcome objections,
how do they negotiate.

If I can assist you further, please call me at 405-820-1740.

Important Tips For Buying Disability Insurance


Are you insured in the event you become disabled?  Many Americans don’t have disability coverage because they don’t feel that they need the insurance.  Ask yourself if you could afford to support yourself and loved ones if you were out of work for a long period due to illness or injury.  Strangely enough, many of us carry life insurance policies to protect our families in case of death, but decline disability coverage.  For younger workers, it’s more likely you will be injured than it is that you will die.  It also is more likely that you will be hurt away from your job than on the job and that you will become disabled due to disease than to an injury. 



When considering long-term disability insurance there are several things you should keep in mind.  The first item is that most automatic disability coverage given by the majority of employers is not enough to sustain you during an injury.  You will probably need to purchase additional coverage.  If you carry only your company’s insurance, you may lose your right to appeal a denied claim.  This is because the insurance company works for your employer, not for you.  So your individual rights may be limited.  You also need to find out if the benefits you receive will be taxable income.  Most company policy benefits are taxable, but some individual policies are exempt. 
 


When purchasing individual coverage, look for a policy that will provide you with the best coverage and the least number of restrictions.  Most policies are fairly specific about what is covered and what is not.  The rates for coverage often are calculated based on your age and sex.  For example, a middle age female can expect to pay slightly more than her male counterpart does.



When shopping for a policy, use a licensed agent who is approved to work with several insurance agencies.  This will provide you with a broader range of options.  Individual policies that are not regulated by the Employee Retirement Income Security Act (ERISA) give you greater flexibility and safeguards to protect yourself. 


If you can afford it, be sure that your policy is based on your overall ability to do your specific job.  Avoid policies that provide benefits only if you become totally disabled.  And, be sure that your policy is not written such that if you can perform even a portion of your job, your benefits will be reduced.  Your best bet is to purchase a total disability policy. 

Look for a policy that covers both physical and psychological disabilities.  Also, make sure your policy waives your premium during any period of disability.  Most policies have only a short waiting period to get started and the benefits should be applicable for your entire lifetime.  If they do not last for your entire lifetime, aim for an age when you know that you will be getting another income such as Social Security or a pension. Be sure that your coverage is guaranteed as long as you pay your premiums.  If possible ask for a cost of living increase to be written into the policy.  It will be worth it if you find yourself disabled.


Purchasing a long-term disability policy is a good idea for most working adults.  Disability insurance not only offers you peace of mind, it’ll go a long way to support you and your family if the unforeseen strikes.

Real Estate Corner…


      Q.    We want to purchase a home but fear that our poor credit will prevent us from getting financing.  How can we repair our credit?

A.     Initially, you need to obtain a copy of your credit report and contact your creditors.  You will need to explain your current situation and offer to pay a percentage of your outstanding bill. 


Often creditors will settle for 30-40 percent of the total bill.  Once you have made your partial settlement payment, get them to issue you a signed settlement letter.  Copies of these letters will need to be sent to all of the credit bureaus (Equifax, Trans Union, and Experian/TRW).  In the eyes of a lender, this is a better method of rectifying your credit than setting up a payment plan though a consumer counseling service.  By resolving your own credit problems using the partial payment approach, it demonstrates to lenders your ability to be a responsible credit user.  In addition to avoiding the consumer counseling services, you should also avoid filing bankruptcy if at all possible.  This act will stay on your credit for a period of 10 years.  One of the only ways to redeem yourself in the eyes of a lender after filing bankruptcy is to get secured credit cards.  These are prepaid credit accounts that allow you to demonstrate your ability to spend wisely.

When looking for a mortgage after credit problems, look to mortgage brokers.  They are often able to offer you greater options than mainstream lenders.  Just because you have credit issues, don’t expect that you will be stuck with higher interest rates.  Some lenders can offer you great options.  Once you have begun to repair your credit history, it is imperative that you make payments on time.  Lenders who give you a second chance will not be a lenient with borrowers who have a history of credit problems.  It becomes your responsibility to prove to the lenders that you are capable of controlling your credit future.

If you are thinking of selling or buying soon, and require competent and caring representation,
feel free to call me at 405-820-1740 or email me at: rhonda@rhondasrealestate.com.