Blog :: 2018

6 Mortgage Questions And Answers For The First-Time Home Buyer

Question MarkMortgage questions abound when you're a first-time home buyer. Compounding the challenge is the discomfort interrupting the conversation with a would-be lender or seller to ask about credit scores or how much money you need as a down payment. Everyone knows this stuff, right?

No, they don't all know—so you should ask these questions. Or, at the very least, study up a bit so you know the basics. To help get you up to speed, here's a crash course on the most common mortgage questions (and the answers you need to know). Take five to read on, and wonder no more.

1. What do you need to get a mortgage?

Before loaning you money, lenders want to see proof that you've proven reliable paying off past debts, so you'll need to start establishing credit.

There are ways to verify your past payments on utility bills, cell phone and rent. Getting a credit card is another option, just be sure to pay your bills according to the prescribed terms. Timely payments on car loan or college loans will also help you establish credit and help you get a mortgage.

2. If you have bad credit, how do you improve it?

For starters, check your credit report. It's free to download one copy each year, and you may be pleasantly surprised by what you find. And if the news is bad, there's still hope.

If you’ve got bad credit, frequently it's due to aged activity —an old collection notice, medical bill or something you didn’t know about. Often these issues can be fixed, boosting your credit score fairly quickly.

If you do have a bunch of bad marks and late payments, however, start paying on time and your score will gradually improve. 

3. What’s the difference between a mortgage pre-approval and a pre-qualification?

Pre-qualification is not going to hold the same weight as a pre-approval. You can go online and get somebody to print you out a pre-qual letter. And you’ll find that if you’re negotiating with an agent and they’re looking at a pre-qual letter, it’s probably not worth much to them.

A pre-approval letter — involving lenders fully checking your finances in a verifiable way — takes more time and effort, which is exactly why it carries much more weight. If you're serious about buying a home, get pre-approved to show you mean business.

4. How much down payment do you need for a mortgage?

The gold standard down payment for a mortgage is 20% — so if the home's price is $400,000, you'd have to pony up $80,000 of your own money to get the loan.

If you don't have that much, you can put down less, but you'll have to pay PMI, or private mortgage insurance. It's an extra fee of about $50 to $100 a month that lenders will require to mitigate the risk that you might default on your loan due to your lack of funds.

When you put less down, the trade-off is you actually have to spend more on a monthly basis.

That said, there are some exceptions that allow a buyer to avoid PMI even with a small down payment. Buyers who are in the military, veterans, and family members of veterans may be able to avoid PMI with a Veterans Affairs loan. And once your equity in your home rises above 20%, you can stop paying PMI.

5. What kind of down payment assistance is available?

If you're looking for help with a down payment, the "bank of Mom and Dad" may be a smart start — if your parents have the means to pitch in. Gifted money can help many people qualify for a loan, although you absolutely must tell your lender that the money was a gift. Fibbing on this front will raise red flags.

If private assistance isn't an option, or isn't enough, there are over 2,000 down payment assistance programs across the country that can help, as long as you meet eligibility requirements in terms of income and credit.

Check with one of our real estate agents (or your lender) for more information about programs on the North Shore that will help you become a homeowner.

6. What types of home loans are available?

Loan types vary widely, but typically fall into two camps. The first includes loans with an adjustable rate, meaning the interest rate could change after a period of time. The second includes loans that are "fixed" or "term," meaning the rate will stay the same for the length of the borrowing period. Generally, term or fixed-rate loans are more common and considered the safer option, but it all depends on your circumstances, including how long you plan to stay in the home.

As a first-time home buyer it’s expected that you’ll have a number of questions, so don’t be afraid to ask them. The more you educate yourself about the home buying process, the better … after all, purchasing your first home is a pretty big deal!

Have a lingering question we didn’t answer here? Feel free to contact us.

Spring Cleaning: 6 Steps For An Organized, Clutter-Free Home

spring cleaning your homeIf you’re like most New Englanders, this is the time of year that you begin the countdown to spring. Warmer temperatures and lightweight jackets are on the horizon, so for many homeowners it’s a good time for some spring cleaning.

And if you’re getting ready to sell your home, cleaning up and purging items that you no longer need is a must-do no matter what time of year it is. Our six-step guide will help you declutter and reorganize your home before the flowers bloom.

1. Sort

It’s amazing how quickly items can accumulate in your home. From kitchen trinkets to old clothes that no longer fit (or never did!), these items can take up a lot of space. For a thorough purging, tackle one room at a time. Go through every cabinet and drawer in each room and if you come across an item that is broken, expired, a duplicate or no longer used, put it in your purge pile. Be disciplined; if you're torn about whether to purge an item, err on the side of toss. suggests keeping an eye out for common offenders such as old linens, souvenirs, kitchen gadgets and toiletries. Sort items into four piles: recycle, donate, sell or trash. Depending on the extent of your clutter (and whether you're purging in preparation for a move), you may  need to create such piles room by room. Otherwise, wait until you've conquered each room (including the basement and attic) to sort into recycle, donate sell or trash piles.

2. Recycle

Why not do a good deed for the planet while you get organized at home? Even items that seem like trash -- empty boxes in the basement, kitchen storage containers missing a lid, broken appliances and date electronics – can be recycled.

For a full list of items that can be recycled check out this A-to-Z guide from Real Simple or contact your local Department of Public Works for details about what can be recycled through your town. And if you want to replace some of those dated or broken items, Best Buy offers an electronics and appliances recycling program that includes an option to trade in items for a Best Buy gift card.

3. Donate

What may be old and unused in your home may be just what someone else needs but can’t quite afford. Donating items is not only a great way to purge, but it’s an opportunity to help other’s in your community.

If you have outgrown baby items such as clothes, bathtubs and swings, the Hallmark Health Mother’s Helping Mother’s Program accepts donations for their free store. The Mission of Deeds in Reading is a wonderful community resource that accepts household donations for those in need. Animal shelters and boarding facilities often welcome and appreciate old linens including quilts, blankets and towels. You can also offer items for free via online community or yard sale groups (see below).

4. Sell It

As they say, one person’s trash is another person’s treasure. In today's digital world you can pass along your unwanted items and make a little extra cash without setting up everything in your front yard. If you’re a Facebook user, consider the marketplace where you can list items for sale, or join an online yard sale group by simply searching your town name and online yard sale. For example, Reading, MA Online Yard Sale and North Shore Online Yard Sale are just two local options. In addition to using social media, Craigslist and online consignment stores are other resources for easy online selling.

5. Get Rid of It

While recycling, donating or selling unwanted items are good initial options, don’t hesitate to dispose of items that you no longer need or want. Visit your town website for regulations on what types of items can be disposed of curbside or at trash collections centers. If your purging effort is substantial, renting a dumpster or dumpster bag are also good options. 

6. Reorganize

Once you’ve purged and decluttered your home, set yourself up for a quick and easy spring cleaning next year by getting reorganized. Like the sorting process, approach the reorganization process room by room. Are you making the most of the space in your living room? Can you eliminate clutter by adding more storage in the kitchen? Do the bookshelves in your office need reorganizing? Are hair products and makeup taking over your bathroom counter? HGTV offers some great tips to help you declutter one room at a time.

Sorting, purging and organizing is indeed a process and not a one-day event. Using the room by room approach will certainly make your spring cleaning less daunting and perhaps more satisfying.

The Outside Matters: A Calendar to Serious Curb Appeal

CalendarIt’s no big deal ... just a bit of peeling trim, slightly tarnished door hinges or a few chipped paver stones on the walkway. Seeing them daily, it’s easy to stop noticing the little blemishes around your home. But an interested buyer is not only likely to notice the little things, but also to make the leap to presume that your home is not well maintained.

As well-documented on television shows like Property Brothers and Love It Or List It, readying your home to sell at a great price is a substantial endeavor. Cleanup, purging and staging efforts are not limited to the interior of the home.

Prospective buyers approaching your home from the street take in your property in a sweeping glance. And then? They judge it … promising or underwhelming, impressive or disappointing.

Over a series of posts, we’re providing a month’s worth of maintenance tasks to maximize your home’s exterior curb appeal. Check off one daily and your home will show beautifully.

First impressions are lasting (the street view)

As your home’s possible new owners emerge from their car and approach the front door, there are dozens of ways you can impress – or disappoint.

  1. Mailbox and post: Assess your mailbox with a critical eye: Does it need to be cleaned or replaced? Is the house number faded or worn? Would the post benefit from fresh paint or should it be upgraded?
  2. Driveway: Fill driveway cracks and re-seal the driveway.
  3. Front walkway: Is there moss or growth between your paver stones leading to the front door? Remedy with a power washing -- and keep moss from coming back with a product like Wet & Forget.
  4.  A well-lit view: If you have walkway lighting, is it in good working condition? Replace any burned-out bulbs or broken fixtures.
  5. Yard décor: Different strokes for different folks. Though you may be partial to garden gnomes, holiday flags and birdbaths, they’re a matter of personal taste. Best to pack these goodies away for your next home.
  6. Front steps: As the potential buyer grasps the railing, will he note that the paint is peeling? Check it yourself and take action before putting your home on the market.
  7. Storm door: If you have a glass storm door, make sure it sparkles with a weekly vinegar and water cleaning inside and out.
  8. Exterior entry: Lots of opportunities here! First, vacuum the exterior door and trim carefully to remove loose debris and cobwebs. Then wash both the glass and the surface of the door thoroughly.
  9. Front door: If your metal door has oxidized, restore the luster with a product like Everbrite
  10. Fixtures: Since they’re exposed to the elements, more than likely your door knob, door knocker and doorbell need some love. Exterior light fixtures can pit over time; replace if needed or spruce them up with a cleaning and some polish.
  11. Door mat: Yes, it’s just for wiping off snow, leaves and mud, but a new doormat is a must if yours isn’t in pristine condition. 
  12. Garage: If your home has a garage, make it an asset. Lubricate the door opening mechanisms so they operate smoothly and without excessive noise.

Up, up (but hopefully not away!)

Approaching your home on foot, cast a look upward for a bird’s eye view. Consider the following potential concerns from a prospective buyer.

  1. Roof: Snow-packed roofs in winter can melt to an ugly surprise in March. A moldy roof sets off alarm bells for buyers; quell their concerns with a pressure washing.
  2. Evidence of Christmas past: Remove and dispose of remnants of holiday lights, wreath hooks and faded decorations.  
  3. Gutters: The downside of our colorful autumn leaves in New England is that many end up in the gutters. A gutter cleanout takes a professional about 15 minutes – and helps maintain your home’s  condition. Banish debris-filled gutters with an annual cleanout.
  4. Overgrown trees: Remove any dead tree limbs and trim overgrown shrubbery.
  5. Shutters: Are yours in good condition? Repair, pressure wash or paint as needed.

Start chipping away and soon enough your home will start to display some serious curb appeal.  And stay tuned for more ... in Curb Appeal Part 2 we'll offer some great tips for tackling the side view and backyard. Check back often or follow us on Facebook to be sure you don't miss it. 

Selling a House to a Family Member: Tax Implications and Experts You Should Hire

House KeysIf you're thinking of selling your house to a family member, first, congratulations are in order. You've found a buyer! The most strenuous part of the home-selling process is already over. So now what? How do you actually sell a piece of real estate to a member of your family?

To hire — or not hire — a real estate agent

It's all in the family, right? It can be tempting to bypass the regular process of hiring a real estate agent to broker the deal. And indeed, this is one of the very few home sale circumstances when it could be an acceptable plan.

Then again, even seemingly simple and straightforward real estate transactions can get contentious, and that's really ugly when the buyer is a family member. Hiring an agent as an informed third party to help navigate the negotiation process can actually make things easier -- and keep the family happier.

Although agents usually work on a commission basis, if you and your family member have already agreed on the price, you may be able to find one who will work for a flat fee to help you through the process. After all, the agent doesn't need to spend time marketing the property—you already have a buyer!

Hire an appraiser

Even if you've agreed upon a selling price, you'll need to have the home appraised if your buyer is seeking a mortgage. Lenders typically require appraisals to ensure the value of the home is high enough to match the value of the mortgage.

Michele Lerner, author of "Homebuying: Tough Times, First Time, Any Time," recommends getting the appraisal done before signing any paperwork, just in case you find out you're undervaluing your home.

Hiring a lawyer is highly recommended

Another person the experts say you must hire is a real estate attorney to help guide you through the selling process. A lawyer can provide clarity if any legal issues arise during the sale of the home. Typically, they also perform a title search to ensure there aren't any liens on the property and determine any zoning restrictions that prohibit your family member from making future improvements on the house.

What about gift tax?

You may want to give a family member a break on the price of the house, but don’t be too generous. There are tax consequences if you're selling a house to a family member at less than fair market value. Why? Because rules are put into place specifically to keep people from avoiding the federal estate tax by giving away their assets.

So that sweet deal you cut your family member is actually seen by the Internal Revenue Service as a gift, and any discount in price will be subject to a federal gift tax. In other words, if you sell your home to a family member for less than the fair market value, it's a gift.

The IRS allows anyone to give up to $14,000 per year to any number of people without having to pay gift taxes. So, if your the difference between your home's market value and the selling price is more than $14,000, you'll owe taxes on the sale.

Selling to a family member?  We’re happy to guide you through the selling process. Contact us to connect with one of our licensed real estate professionals.



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Think Big: 7 Home Staging Secrets to Make a Small Living Room Look Huge

Staging DesignWhen it comes to home staging, the golden rule is make your space look bigger to would-be buyers. And perhaps nowhere is that concept more vitally important than in the living room — the place where homeowners tend to spend most of their time entertaining and relaxing, and where potential buyers will be placing extra scrutiny.

But you don't have to knock down walls or spend a small fortune to make your space look big. Fortunately, there are a few quick and relatively affordable ways to maximize your living room's first impression, even when the square footage is lacking.

1) Don't leave your living room empty

It might seem counterintuitive, but an empty room gives buyers no point of Minimalist Stagingreference for size. Staging rooms helps establish a room's size and enable a buyer to visualize how they can arrange their own furniture.

But don't just shove some furniture in the living room and call it a day. There's actually a science to arranging your stuff in a way that makes the room feel bigger.

Most buyers scan a room from left to right upon entry. If you place the tallest piece of furniture in the far left corner, the room will appear larger than if that same piece of furniture is closer to the entry. When a large or tall piece of furniture is near an entryway or door, it tricks the eye into thinking a space is smaller than it is, so keep taller items in corners -- or eliminate them altogether.

2) Carefully consider your seating scheme

Choose a focal point—a fireplace or windows with a view are the common choices, but yours may be a great piece of art or a family heirloom — and position your seating arrangement around it. Keep in mind that you want prospective buyers to imagine themselves actually living in and using your space, so your seating concept should encourage relaxation and conversation.

Living in the space also means carefully considering the circulation flow of your rooms. Make sure there aren’t large pieces of furniture in walking paths.

3) Scale down your furniture

Even if it's high-end and tastefully decorated, you never want to fill your small space with a Scale down furnituretruckload of huge stuff; you'll dwarf the space.

Choose smaller scale furniture to leave more white space, which will make the room seem larger. Select light pieces in materials like wicker or rattan (both of which are typically in high supply at retailers such as HomeGoods and Marshalls).

Beware not to go overboard with the tiny pieces. Too many can make a room look cluttered and therefore -- smaller. Less is more here, folks.

4) Build around your largest piece — and edit ruthlessly

large piece of furnitureMaking the most of a small space can be difficult. Start by assessing the room for your largest piece (likely your sofa), and judge every other item in the room against it.

Ask yourself, "Does this item serve a purpose, either functional or decorative?" If you can’t come up with an answer immediately, it’s not worth keeping.

While you're at it, ditch bold, busy pieces of artwork for more neutral, unobtrusive prints, and get rid of the family photos on the mantel. Remember: The goal is for your space — not your stuff — to do the talking.

Pro stagers also nearly universally recommend ditching TV sets, which occupy a lot of visual real estate. The only exception? A wall-mounted, flat-screen TV that's appropriately sized to the room (that's the kicker).

5) Balance color

You don't need to slather your walls in an uninspiring, institution-evoking white. Red rug white couch designYou can have some fun with color. But you'll need to follow some basic rules to avoid overwhelming the space.

First, and perhaps the most obvious, you'll want to nix dark or bold paint colors, which make cramped spaces feel tighter. 

Brighter colors should be used in limited amounts and repeated for balance. If the rug is red and everything else in the room is various neutral shades, include red in the pillows or accessories.

For ceiling colors, choose a shade that's lighter than your walls to create the impression of openness. And for extra credit, match your wall color to larger (lighter-hued) pieces of furniture.

6) Choose the right materialsmetal and glass furnishings

Choose furnishings and accent pieces crafted of materials like glass and metal, which reflect light and feel more airy. They give a greater sense of space than dark and bulky wood pieces.

Replace heavy bookshelves with floating shelves instead (like these from Ikea). Then, declutter their contents by at least 60%.



7) Lighten upLiving Room With Natural Lighting

An abundance of natural light tricks the eye into thinking a space is larger. To maximize light, keep your window treatments minimal with a simple pleated shade for privacy. Choose lightweight, airy fabric curtains, such as voile or linen and mount the rod as close to the ceiling as possible to create the illusion of height.

If your rooms don't have a lot of natural light, hang mirrors to reflect the light you have.

When selling your home, first impressions are everything. Although staging can be tricky, when done right a small space can appear bigger and more appealing to prospective buyers.

Need help getting your home ready to sell? See our home selling tips or call us at 978 664-3700. We're happy to help.