Latest news with #RalphDiBugnara
Epoch Times
20-05-2025
- Business
- Epoch Times
10 First-Time Homebuyer Tips: How to Get That House
By David McMillin If you're still renting your place, the thought of buying a home can feel pretty overwhelming. A recent TD Bank survey of first-time homebuyers found that 64 percent of people who have never owned a home are concerned about affordability due to high If you're one of them, read on for some money-smart moves that can put you on the path to successfully buying a home. 1. Check Your Credit (And Work on It) The higher Pull your reports Thoroughly understand where your credit stands by pulling a free copy of your report at It's not a one-and-done free ticket, either; the site lets you pull your report every week without paying anything. It's important to note that your credit report may look different depending on the credit bureau. There are Experian Equifax TransUnion It's wise to look at all of your reports because you never know which report a lender will analyze. 'Look for any errors or past-due accounts that might have gone to collections,' says Ralph DiBugnara, president of New York City-based Home Qualified, an online resource for homebuyers. 'These liabilities can create roadblocks when you apply for a home loan. If anything is amiss, contact the creditor to see if you can sort it out.' Fix and then monitor your credit In addition to contacting a bureau if you spot any mistakes, follow these steps to keep your credit in the best shape possible: Pay down your credit card balances: Most lenders like to see a credit utilization ratio of 30 percent or less, according to Lindsey Shores, business development manager with SchoolsFirst Federal Credit Union. 'For many people, this number is something they have to plan for and work to pay down to achieve,' she says. If you're over that number, try to pay down your balances. Pay your bills on time: Follow this step whether you're trying to buy a house or not—you can make or break your credit by making your payments on time every month. Take advantage of free credit monitoring tools: Many banks have free credit monitoring tools built into their mobile apps, giving you the ability to check your credit score easily and more frequently. 'You'll get notified if your credit score changes, or if there's suspicious activity on your report,' says DiBugnara. 2. Nail Down Your Budget When you're building a budget to narrow your search for properties, don't just think about Principal and interest: This will be the bulk of your monthly payment, and if you take out a fixed-rate mortgage, this chunk will never change over the course of the loan. Homeowners insurance: How much you'll pay to protect the property can vary widely. If you're buying in an area with higher risks for flood, wildfire, or other severe weather, you'll need to be prepared for higher, ever-increasing premiums. Property taxes: Your property taxes will look different depending on the location, and, in most cases, will increase as your home's value increases and/or your local government needs to raise them for their budget. HOA fees: If you're looking at condos or homes in a homeowners association, ask how much you'll pay each month in HOA fees. If you're looking at buildings with a gym, pool, and other amenities, these can get very steep. In addition to these expected expenses, it's a good idea to put aside some money regularly for maintenance and unexpected repairs. 'As a rule of thumb, I tell clients to prepare to spend 1 percent to 3 percent of the value of their homes each year on house [expenses],' says Steve Sivak, a 3. Consider Your Needs and Wants Finding the ideal location and address can take more time than you expect, so begin scouting neighborhoods early in the process. 'Drive and walk around that area at different times of the day and night,' says Bill Golden, a Realtor and associate broker with Keller Williams Realty Intown. 'This will help you get a feel for what you like and don't like.' Along with pinpointing the neighborhood, now is a good time to narrow down your preferences for the home itself by considering these essential questions: Related Stories 5/19/2025 5/16/2025 What type of house are you looking for? What can you compromise on? What are the dealbreakers? Are you willing to look at older properties that may require some updates, or do you want a move-in-ready property? Think about what you like and dislike about where you currently live—that can help inform your list of needs and wants. 4. Get Finances in Place Regardless of income level, you should be able to document to potential lenders that you have a stable source of earnings. 'Your income and how much you earn monthly will be scrutinized by lenders, who will look for a two-year employment history and want to see consistent income—whether you're receiving a salary, hourly pay, or are self-employed,' says Tom Hecker, a loan officer with Cherry Creek Mortgage. If you're self-employed, be ready for closer scrutiny than someone getting a salary or hourly wage. In terms of your liquid funds and overall financial health, in addition to reviewing your credit report, mortgage lenders typically look at your bank statements from the last two months when assessing your application. If you plan to make any deposits into your checking or savings accounts from other assets—such as a down payment gift—do it before that 60-day window. This gives the funds time to ' And it's best to avoid opening new credit accounts or loans, or racking up more debt, at this stage, DiBugnara adds. All those activities could possibly ding your credit report. 5. Comparison Shop Mortgage Lenders At this point, you should know what monthly payment you're comfortable with, what areas you can afford and how much you can put down. Now it's time to shop for a mortgage. Consider these factors: Comparison shop: Compare mortgage rates from at least three different types of lenders, as well as different types of mortgages. What others have to say: Read customer reviews for lenders online to get a sense of what the experience is like with individual lenders. Interactions with the lender: Even 'in this market, you can find competitive rates and service, but you want to pay close attention to lenders' responsiveness and communication,' says DiBugnara. The mortgage terms: It's also a good idea to focus on not just the rates lenders quote you but also all the mortgage terms. What are the late fees? What are the estimated closing costs? Is there a prepayment penalty? If you're able to get a mortgage with the bank where you already have accounts, will you get a better deal? Sometimes, it makes sense to choose a loan with a slightly higher rate if the other terms are more favorable overall. 6. Get Preapproved Once you settle on a lender, get Unlike Preapprovals usually expire after 90 days, says DiBugnara, so ask your lender how long yours will be good for. If you're a first-time homebuyer with significant debt or so-so credit, you might want to apply for a preapproval as soon as possible to identify issues to fix. 'Once you have a preapproval in place, keep sticking to your budget and savings plan and continue to pay all debts on time,' says Hecker. 'Try not to make any extraordinary purchases or take on extra debt, either.' 7. Look for Down Payment Assistance There are many Earn less than a specific amount per year, which typically varies by location and household size Purchase a home that does not exceed a maximum amount, which can vary based on targeted and non-targeted areas Take out a loan offered in conjunction with the state housing authority These programs are typically limited to borrowers with an income below a certain level (based on location), and can impose a cap on the home's price, too. Keep in mind that many of these programs have terms that stipulate you must live in the home for a certain period of time to qualify for forgiving the loan and/or avoiding a recapture tax penalty that can come into play if you sell the property earlier than expected and earn a profit. Often, your loan officer can provide info on the available programs and what you might be able to pair with your mortgage. 8. Work With a Real Estate Agent After you have your financing squared away and a preapproval letter in hand, your next step as a first-time homebuyer is to hire a An experienced real estate agent who knows the area you're looking to buy in especially well can advise you on market conditions and whether homes you want to make offers on are priced properly. Your agent can also identify potential issues with a home or neighborhood you're unaware of, and go to bat for you to negotiate pricing and terms. You can start by asking friends, relatives, or co-workers for referrals. 'Don't just pick [an agent] blindly—make sure it's someone who works in the general area you're looking in and whom you feel comfortable with,' says Golden. Offerings 'come up every day, and a good Realtor will be on top of that and get you to see new listings as soon as they become available.' 9. Negotiate With the Seller Even when you see the home of your dreams, don't be afraid to Use comps to justify a lower offer. A low offer can offend a seller, so work with your agent to look at comps that justify why a seller should consider your terms. Did a nearby property with an additional parking spot recently sell for the same amount? Are there other similar homes with nicer amenities listed for less? Back up your bargaining with evidence from the rest of the market. Ask for concessions based on the home inspection report. Is some of the electrical wiring incorrect? Does the furnace seem like it's nearing the end of its lifespan? Are the windows going to need to be replaced soon? If your home inspector uncovers some minor issues with the home, don't be afraid to ask for concessions that will require the seller to cover a chunk of your closing costs. And if the inspector uncovers some major issues, be aggressive in your negotiations—and don't be afraid to walk away from the deal altogether. Request a different closing timeline. Negotiating your home purchase isn't just about money; it's also about time. Depending on your needs, you can ask the seller for a closing date that gives you more or less time to get the deal done. For example, if you really want to avoid paying another month of rent, don't be afraid to request that the seller be prepared to move out earlier. 10. Draw Up a Contract When you find a home and prepare to make an offer, work with a real estate attorney to spell out any conditions or situations that will allow you to walk away from the deal. These are known as Major issues with a home inspection Mortgage application denial A lower appraisal than the offer price If these terms are spelled out in writing with deadlines, you'll have an out if the transaction doesn't go as planned—and get your Bottom Line For a first-timer, buying a home can feel overwhelming and endless. But breaking down the process into steps and tackling them one at a time can help you stay focused and get the job done. Doing your research in advance and working with a trusted real estate agent can help you stay on track throughout the process. Keeping your finances steady and limiting other big-ticket purchases can also help you qualify for a loan and get into your first home. Key Takeaways Before you start looking for homes, take time to evaluate your finances and improve your credit score. There's a big difference between meeting the minimum credit score requirement and showing your lender a credit score well above 750. Remember to account for the variable expenses of owning a home, which include insurance, property taxes, maintenance and repairs. While sellers still have the edge in most parts of the country due to limited inventory, buyers are gaining more bargaining power. Work with an expert real estate agent to develop a negotiation strategy and score a better deal on your first home. Additional reporting by Zach Wichter Copyright 2025 Distributed by Tribune Content Agency, LLC. 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CBS News
22-04-2025
- Business
- CBS News
Does a HELOC put a lien on your house?
A home equity line of credit (HELOC) can give you a way to turn your home's equity into a line of credit you can use when needed. HELOCs have several key benefits that make them a solid borrowing choice in today's market. They operate like a revolving line of credit, giving homeowners flexibility they wouldn't have with a lump sum of equity borrowed. And the average interest rate is 8.02% , making them one of the most affordable ways to borrow money right now. Like any financial decision, though, opening a HELOC takes some planning . What will you use it for ? How much equity do you have? How long do you want your draw period to be? These questions are instrumental in finding the right HELOC for what you need. Additionally, it helps to understand how a HELOC works so you know what to expect once you open it. A HELOC uses a variable rate , which means your HELOC interest rate — and HELOC payment — can change monthly . Additionally, any withdrawals from your HELOC during your draw period trigger interest-only monthly payments until you pay off what you borrowed or your repayment period kicks in. Another thing to consider is that a HELOC is considered a secured funding source . This means your home will serve as collateral. But does that result in a lien being putting on your house? That's what we'll explore below. See what HELOC rate you could secure here today . Yes, a HELOC puts a lien on your home. A lien is a legal term referring to a creditor having a right to ownership of what you're borrowing against, says Ralph DiBugnara, president of mortgage broker Home Qualified. "A lien, basically, is a legally binding placeholder on the title of your home," DiBugnara says. "It's a record [that says] if you ever sell the house or refinance the house that the lienholder that you hold a debt to has to be paid off." A lien typically gives your HELOC lender the right to start the foreclosure process if you're at least 120 days late on your payment, DiBugnara says. However, banks usually won't go straight to foreclosure because it's a tedious process, so they typically take you through three steps before foreclosure begins, he says: If your home goes into foreclosure, your credit score will likely be impacted and the foreclosure will stay on your credit report for seven years, according to the Consumer Financial Protection Bureau (CFPB ). A lower credit score may result in higher borrowing costs for you in the future, which means the foreclosure process can be a financial burden long after it's over. But if you make your payments on time, you generally don't have to worry about any lender liens on your home. Explore your current HELOC options here . To avoid your lien being enforced and, potentially, losing your home to the lender, it helps to know some simple guidelines for HELOC borrowing . First, make sure you have a purpose for opening a HELOC. Using it for the right reasons, like home repairs and renovations that can result in a tax deduction , is key. After you identify the purpose for your line of credit, decide on a HELOC amount that fits the purpose. Borrowing significantly more money than you need could lead to overspending and increase the chances you fall behind on your payments. And, avoid taking out a HELOC to cover everyday costs like groceries and gas, DiBugnara says. "If you're taking out a HELOC to pay your daily expenses, you may put yourself in a position to have a problem," he says. Using a HELOC to cover everyday costs is a sign that you might be in financial trouble, which means you could be in jeopardy of missing HELOC payments and, possibly, going into foreclosure. If you find yourself in that position, an unsecured lending option like a personal loan or credit card may be a better option since you don't have to offer collateral to get funding. HELOC lenders typically place a lien on your home's title if you open a line of credit with them. The lien gives your lender the right to foreclose on your home if you default on your HELOC payments. However, most lenders want to avoid the foreclosure process and will offer you alternative options before it gets to that point. Borrowing a HELOC responsibly, both in the decisions you make before you open one and how you handle your spending after it's open, can help you avoid ever having your HELOC lender's lien become an issue.
