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Which Down Payment Strategy is Right for You?
You’ve most likely heard the rule: Save for a 20% down payment before you buy an Inland Empire home. The logic behind saving 20% is solid, as it shows that you have the financial discipline and stability to save for a long-term goal. It also helps you get favorable rates from lenders. But there can actually be financial benefits to putting down a small down payment—as low as 3% (conventional loan) or 3.5% (FHA loan)—rather than parting with so much cash up front, even if you have the money available.
Which Down Payment Strategy is Right for You?
The Downside
The downsides of a small down payment are pretty well known. You’ll have to pay Private Mortgage Insurance (PMI) for years, and the lower your down payment, the more you’ll pay. You’ll also be offered a lesser loan amount than borrowers who have a 20% down payment, which will eliminate some Inland Empire homes from your search.
The Upside
SFGate reported that the national appreciation value averaged between 3.5% to 3.8% in 2020. The appreciation is independent from your home payment, so whether you put down 20% of the sale price or 3%, the increase in equity is the same. If you’re looking at your Inland Empire home as an investment, putting down a smaller amount can lead to a higher return on investment (ROI), while also leaving more of your savings free for home repairs, upgrades, or other investment opportunities.
The Happy Medium
Of course, your home payment options aren’t binary. Most borrowers can find some common ground between the security of a traditional 20% down payment and an investment-focused, small down payment. Your trusted Inland Empire real estate professional can provide some answers as you explore your financing options.
Muna Dionne, your Inland Empire specialist with Coldwell Banker Realty
Staging Strategies for Your Inland Empire Home
Staging your Inland Empire home is all about putting your best foot forward for potential buyers. By highlighting its most desirable features, you can draw more interest to your home and leave a lasting impression that is sure to help you sell it more quickly. Here are what staging strategies you should keep in mind as you prepare for your next open house or viewing!
Staging Strategies for Your Inland Empire Home
Help Them Visualize it as Their Own
Make it easier for buyers to imagine themselves making your house their home by removing personal memorabilia, knick-knacks, and photos. Instead replace them with simple décors, such as paintings, nature images, and plants.
Think Sleek Instead of Comfy
Modern-day buyers are leaning toward modern, crisp, clean interiors over comfy, homey looks. When staging your home, keep a minimalist mindset and incorporate bright colors and metal accents.
Deep Clean the Small Spaces
It’s obvious to say you should clean your home before viewing, but don’t forget to cover your bases by deep cleaning the small spots. Take time to scrub porous areas like grout that may hold on to stains and baseboards where small pet hairs and dust love to cling.
Spruce Up Your Landscaping
The first impression your home gives to potential buyers is its exterior. Ensure you have a freshly mowed lawn, neat hedges and shrubbery, bright flowers, and a clean driveway.
Set the Mood
A home is so much more than just the way it looks, so you need to appeal to the other senses. Prior to having potential buyers over, set the mood by burning delicious-smelling candles and selecting an upbeat, happy soundtrack to play in the background.
When you are ready to put your Inland Empire home on the market, contact me. I’m always happy to answer any questions and offer any advice necessary to get your house on the road to “sold”!
Muna Dionne, your Inland Empire specialist with Coldwell Banker Realty
CalHFA Programs Help First-Time Home Buyers
You wish to buy a home in Southern California this year. But with a median sale price of $595,000 for a Riverside home, you worry that homeownership might be just out of reach for you. For first-time home buyers, CalHFA may be able to help you out.
First of all, if you have not owned a primary residence in at least three years prior to the date of purchase of a new property, you are considered a “first-time home buyer”. HUD includes four other scenarios where you may be considered a first-time home buyer even if you previously owned property. Check their website at the link above to see if you qualify. If you meet the criteria of a first-time home buyer, congratulations! You successfully passed the first hurdle in the race to homeownership through CalHFA.
Requirements for the Buyer(s)
After you meet the definition of a “first-time homebuyer”, you must have a minimum credit score of 660 for a low-income loan. Otherwise, you must have a 680 minimum credit score. Additionally, your debt-to-income ratio must not exceed 43% (for manual underwriting) or 45% (for automatic underwriting). In Riverside County, your household income cannot exceed $153,000. Only US citizens, permanent residents, or qualified aliens may apply. Finally, all applicants must complete and present proof of completion of a HUD-approved home buying course.
Requirements for the Property
Along with specific buyer requirements, the property you purchase must also meet certain requirements to qualify. These include a sales price of $765,000 or less. You must maintain this property as your primary residence. Also, it must be located in the United States. If located outside of Riverside County, your household income limit may be different. Talk to your CalFHA advisor if you have any questions. Finally, the property must be a single-family, single-unit residence. However, some condos, guest homes, and manufactured homes may be allowed. Again, discuss this with your advisor if this applies to the property you wish to purchase.
CalHFA Programs
CalHFA offers four programs for government-backed loans (FHA, VA, and USDA) as well as two programs for conventional loans. Just because you meet the requirements for a particular CalHFA program does not guarantee that you will be approved for a loan. Buyers must meet the lender’s requirements as well. The CalPlus FHA and Conventional programs allow you to also use additional financial assistance programs for your down payment and closing costs if needed. But you end up paying a little bit higher of an interest rate.
For more information about these programs, please visit the CalHFA website here. When you want to start looking at homes for sale in the Inland Empire, contact me.
Muna Dionne, your Inland Empire specialist with Coldwell Banker Realty
Common Home Issues Inspectors Uncover
Before finalizing your Southern California home purchase, one crucial step in the process is the home inspection, during which a licensed inspector looks at the structure, plumbing, electrical, HVAC, and more. Here are five common home issues inspectors keep an eye out for.
Faulty Electrical Systems
Out-of-date electrical systems, lack of adequate power supply, faulty circuit breakers, or exposed wiring can spell disaster for a Southern California home. Inspectors can sniff these issues out and recommend repairs to ensure the home is wired safely and properly.
Poor Drainage
If the home has landscaping that causes water to drain towards the Inland Empire home, it can cause foundation shifts or cracks, wet crawl spaces, mold, and rot. This can be incredibly costly to correct, so it’s important to determine this before going through with the home purchase.
Leaks
Inspectors look for leaks in the roof to ensure there are no damaged shingles, gutters, flashing, or other issues. They also look for any possible causes of plumbing leaks, such as broken seals, corrosion, clogs, damaged pipe joints, and more.
Mold
Showers, tubs, air conditioning and heating vents, attics, and basements are some of the most common places inspectors find mold. This can lead to various health issues for the home’s occupants, like headaches, skin irritation, and respiratory issues.
HVAC Issues
During an inspection, the inspector looks for issues that could impact your ability to heat or cool your Inland Empire home. These include blown fuses, pilot and ignition issues, damaged coils, dirty filters, gas leaks, and cracks in the ductwork and pipes.
With the inspector’s report, you can head to the closing table with more confidence and be prepared to negotiate repairs with the seller if necessary. When you are ready to start looking for your next home, contact me.
Muna Dionne, your Inland Empire specialist with Coldwell Banker Realty
Hidden Fees to Be Aware of When Buying a So Cal Home
Purchasing a home is arguably one of the biggest financial decisions you will make in your lifetime. As you start your hunt, don’t forget there will be costs associated with your purchase other than the price of the home. Here are five “hidden fees” to keep in mind as you begin to budget for your next So Cal home.
#1 Home inspection
This is a crucial step in the home buying process. The findings that come from the home inspection can help you negotiate price and repairs. Generally, you can expect to pay between $300 to $500 depending on the home and the location.
#2 Title services
Title services encompass the transfer of the title from the seller and a thorough search of the property’s records to ensure that no one will pop up with a claim to the property. Additionally, you may need to buy title insurance which will protect the lender or your investment in the home.
#3 Appraisal fee
Before getting a loan, you will likely be required to get an appraisal of the home to determine its estimated value. This will be conducted by a third-party company and the cost can land anywhere between $300 and $1,000, depending on the size of the home.
#4 HOA fees
Many communities have a homeowners’ association that enforces monthly fees. This money is used for general maintenance and updates to areas like pools, parks, and more. Typical HOA fees are around $200 per month.
#5 Taxes
The taxes each buyer pays at the closing table differ, but it is not uncommon for it to be up to two months’ worth of county and city property taxes. Additionally, there may be taxes for the transfer of the home title.
Muna Dionne, your Inland Empire specialist with Coldwell Banker Realty
How to Boost Your Credit Score
Whether you plan on buying your first home or your tenth one in 2022, you need to make sure your credit score is at its best. Any score of 740 to 799 is considered very good. But to reach “excellent” status, you need to hit 800 or above. Fortunately, you do not need an “excellent” score to qualify for a mortgage loan. However, the higher your score, the better the interest rate you receive. Lower interest rates mean lower monthly payments. While some programs allow a FICO score in the 500s, you really want to aim for something higher than 620 to qualify for a respectable interest rate. So, before you even start looking for an Inland Empire home, get your credit in shape.
How to Boost Your Credit Score
Get a Copy of Your Credit Report
Legally, everyone may obtain a copy of their credit report from each of the three reporting agencies (Experian, Equifax, and TransUnion) once a year. First, visit AnnualCreditReport.com to order your free report. Second, look for any errors in the report. These include wrong addresses, the status of your accounts, and accounts you never opened. If you find any errors, report them to the creditor who made the error as well as the agency reporting the erroneous information. Each agency uses its own method for filing a dispute. Visit the corresponding agency’s website to find out what you need to do.
Pay Off Your Most Recent Collection Accounts
Notice that I did not say pay off “all” collection accounts. Some collections may be so old that paying them off now might not affect your credit score at all. Talk to your lender to find out which ones to concentrate on first. Instead of paying the collection agency, though, you should pay the original creditor. This works more in your favor.
Pay Your Balances Down
The next step to take when boosting your credit score is to pay down your balances. But paying them off might not necessarily be the best course of action. Rather, aim for a balance of 30% of your limit or lower. If you have three credit cards with high balances on each, you should focus on paying one down to 30% of its limit. Then, move on to the next card until it is paid down to 30%. And so on.
Another way to lessen your balance-to-usage ratio is to ask your credit card company for an increase in your limit. As long as you avoid charging any more on the card, you end up paying the balance down to 30% faster. How? Well, let’s say that you have a $2500 limit on your credit card with a $1250 balance. That equates to a 50% credit utilization. Too high for most lenders. However, your credit card company agrees to increase your limit to $5000. That same $1250 balance now equates to 25% credit utilization. Your creditor may not agree to this much of an increase (or any at all). But it is always worth a try.
Set Up Auto Pay Whenever Possible
We all lead busy lives nowadays. Missing a payment date may happen easier than you think. Since your payment history makes up a significant portion of your credit score (35%), you need to make sure you pay on time. By setting up an automatic payment arrangement with your creditors, you avoid missing payment dates and harming your credit. Some banks offer programs that allow you to set auto pay up directly from your bank account. Many credit card companies, car loan companies, medical facilities, and even utility services allow you to do the same.
Experian Boost
You saw me say “utility services” before. Sound strange? Well, one of the credit reporting agencies actually allows you to submit your utility service payments as part of your payment history for your credit score. Experian Boost takes just a few minutes to complete. Not all credit scores increase. But it might help yours. And it is free to complete. So, it is very much worth a shot.
When you get your credit score to its best place possible, talk to a lender about starting the loan pre-approval process. Then, contact me to get you started on your Inland Empire home search.
Muna Dionne, your Inland Empire specialist with Coldwell Banker Realty
How to Get the Most Money for Your Home Sale
You want to take advantage of the increase in home values we have seen over the past couple of years by selling your Inland Empire home. Great! First, you should read my home seller pre-list checklist to get started. Then, follow these four simple steps to fetch top dollar for your home sale.
Set Each Room Right
Home staging is one component of my pre-list checklist. Part of home staging includes restoring each room back to its original purpose. If you used the dining room for your home office, the kids’ playroom, or for a general “catch-all” space during the pandemic, stop. Bring the dining table back into the dining room. If the loft sat empty because you had no idea what to use it for, convert it into the family movie room, a home gym, or even put your home office there. Bottom line: buyers want to see each room utilized as what it was originally designed for to help them picture themselves living there.
List Slightly Below Market Value
You might be thinking, “Wait! How can I make more money from my home sale if I ask for less money?” Well, listing slightly below market value brings in a larger group of home buyers. With more people, comes a better opportunity for more offers. Multiple buyers tend to drive the final sale price up as well. Of course, this can be a risky venture if you only end up with one buyer at the lower list price. So, talk this over with your real estate agent first to see if it is a viable strategy to use in your neighborhood.
If a Picture’s Worth a Thousand Words…
…how much do you think a video tour is worth? Millions! Photographs are strongly encouraged. However, you can bump up your home’s attractiveness by including a video tour of the property as well. These proved even more popular since COVID lockdowns made in-person tours almost obsolete for a while. Even though live tours are back, buyers still like to see a video of the property before they head out to see it in person. And it allows a better view of your Inland Empire home for buyers coming in from out of the area, too.
Get a Professional Pre-Inspection Done
Finally, pay a professional to come out and inspect your Inland Empire home. This helps you identify places that need repairs right away. That will help you get the most money out of your home sale. Plus it eliminates any “surprises” that the buyer’s home inspection may unravel. It also saves you money by allowing you the time to research prices for the repairs. Or, at the very least, you can gather quotes to fix problem areas and present these to the buyer. But be prepared to lower your asking price if you do not take care of these repairs yourself ahead of time.
Muna Dionne, your Inland Empire specialist with Coldwell Banker Realty
