15 Confusing Mortgage Terms Explained

1. Adjustable-Rate Mortgage
2. Amortization
3. Annual Percentage Rate
4. Attainable Housing
5. Buydown
6. Closing Costs
7. Default
8. Discount Points
9. Due Diligence
10. Easement
11. Eminent Domain
12. Escrow
13. First-Time Homebuyer Programs
14. Lien
15. Loan Estimate

Understanding the terms you’ll see on your home loan documents is key to getting more out of your mortgage.

The post Top 15 Confusing Mortgage Terms, Explained appeared first on Cardinal Financial.

1. Keep it clean

A clean home will always be more enticing to buyers than a messy one. So, when you’re selling your home, it’s important to declutter and remove any excess furniture, family photos, and other personal items so that prospective buyers can envision their own family in your house. You want your home to look as big and as new as possible. It may also be a good idea to hire a cleaning service.

2. Stay available

You never know when a buyer may want to view your home. Ideally, you’ll have enough advance notice to prepare, but being able to accommodate a last-minute viewing could go a long way toward building goodwill with the buyer. Don’t leave dishes in the sink, keep your bathrooms clean, and make sure everything is dusted and well swept.

3. Don’t delay repairs

Anything that could deter a potential buyer from making an offer should be fixed before you start showing your home. Some repairs may seem minor, but these seemingly insignificant issues can really add up in the mind of a buyer, and in some cases, they may not see your home as worth the trouble of fixing all those little things. Don’t give them a reason not to make an offer. You can also leverage these repairs in the purchase price of your home! Making repairs builds equity, so you may be able to sell for a higher price that takes into account the value of the repairs.

Pro Tip: If you really don’t want to play handyman, you may be able to negotiate with the buyer to sell your home for a lower price, provided they take responsibility for any needed repairs.

4. Maintain a comfortable temperature

Now isn’t the time to worry about your energy bills. Make sure potential buyers are comfortable when they’re touring your home. If it’s cold outside, leave the heat on. If it’s hot, some refreshing AC will put them in a good mood as soon they walk in.

5. Keep it light (literally)

Not only do poorly-lit homes feel less inviting, but from a practical standpoint, they also make it harder for buyers to see what they’ll be paying for. Make sure you’ve got all your lights on and your blinds open to show your home at its best.

6. Keep your pets out of the way

Even if your buyers have pets, they don’t have your pets. In the spirit of making the home feel like a fresh start for buyers, keep your pets out of the way during showings if possible. For outside pets, an enclosed outside area should be fine. If your pets are strictly indoors, consider closing off an area of the home for them or leaving them with someone you trust for the day. And of course, make sure pet hair and waste are cleaned up before showing your home.

7. Be realistic about your price

Hear us out: Consider underpricing your home. Why? If you underprice your home, you’ll likely receive more offers from multiple buyers with multiple bids, even in the toughest markets. When you start fielding multiple offers, it could result in bidding up the price to well over what it’s worth. Plus, with rates being what they are in the current market, if you price your home too high you may get very few offers as most potential buyers are on a tight budget.

Bonus home-selling tip

The best home-selling tip we can give you is to stay flexible. You are, after all, selling your home to people, and people’s lives can get unpredictable. They may need to reschedule showings, negotiate on the price, or finalize the purchase later (or sooner) than you feel is ideal. Remember that you may be selling your home, but the buyer is the one who’ll be living in it for years to come. It’s normal for them to obsess over the details. And when it’s your turn to buy, we’re here to help with all of those details, too.

The best home-selling tip we can give you? Stay flexible.

The post 7 Simple Home-Selling Tips for Any Market appeared first on Cardinal Financial.

5 Summer Home Energy-Saving Tips

• Upgrade your window treatments
• Install a smart thermostat
• Replace air filters
• Caulk gaps around windows and doors
• Use power strips

Upgrade your window treatments

Only the good kind of shade here. During hot months, window treatments such as blinds, shades, and curtains can help reduce sun exposure in your home, keeping temperatures from spiking indoors. Reflective or light-colored window treatments are particularly effective in reflecting sunlight away. This reduces the need for air conditioning, leading to lower energy consumption and costs.

Install a smart thermostat

Smart home features are everywhere these days, and one perk of a smart thermostat is that it can sync with smart devices you already have. More importantly, smart thermostats can significantly reduce energy consumption by learning your schedule and preferences to optimize heating and cooling. They can automatically adjust the temperature when you’re not home or when you’re asleep, leading to lower energy bills. Some models also provide energy usage reports so you can monitor and manage your consumption more effectively. 

Some smart thermostats even offer advanced features like zoning, where you can set different temperatures for different rooms or areas in your home. They can also provide real-time weather updates and adjust settings accordingly.

Replace air filters

A clogged air filter can restrict airflow, forcing your HVAC system to work harder to maintain your ideal temperature. This increased strain can lead to higher energy consumption and utility bills. When you replace air filters regularly, your HVAC system operates more efficiently. Plus, replacing air filters is essential to maintaining the air quality in your home. Allergies? We don’t know them.

Caulk gaps around windows and doors

Proper insulation is important year-round, not just during the summer. Doors and windows are common sources of air leaks, where conditioned air from inside your home can escape, and outside air can enter. This exchange forces your heating and cooling systems to work harder to maintain a consistent indoor temperature. Caulking these gaps and cracks reduces the workload on your HVAC system and conserves energy.

Use power strips

Just because a device is turned off doesn’t mean it isn’t using energy. Many electronic devices and appliances continue to draw power if you leave them plugged in, even when they’re turned off. Power strips can cut off power completely to these devices when they’re not in use. It might seem like a small difference in energy consumption, but it can lead to significant savings over time.

Many power strips also come with built-in overload protection, which can help prevent electrical fires and damage to your devices. By protecting your electronics from power surges and overloads, power strips can contribute to the longevity and efficiency of your appliances. In the long run, this saves energy and reduces waste from having to purchase new devices more frequently.

Bonus summer home energy-saving tips

Some summer home energy-saving tips will yield more savings than others, but every little bit helps. If you’re looking for some additional ways to trim costs this season, here are some bonus strategies to try. 

• Wash laundry with cold water
• Save tasks like laundry and cooking for cooler hours of the day
• If you have a pool, keep it covered when not in use
• Switch to LED lightbulbs
• Keep the thermostat at 78 degrees

Don’t forget that being comfortable in your home matters just as much as your budget. If you need to turn the thermostat down a few degrees, don’t sweat it.

Reducing your home’s carbon footprint is never a bad idea, especially when it means you could save on your utility bills during the hot summer months.

The post The Best Summer Energy-Saving Tips for Your Home appeared first on Cardinal Financial.

1. Give it a good clean

The outdoor surfaces of our homes often don’t get the same amount of love as the interior when it comes to cleaning. After all, it’s inevitably just going to get dirty again. All that dust and dirt builds up though, so consider investing in a heavy-duty cleaning before listing your home. Pressure washing your driveway, siding, and porch can make a noticeable difference in your home’s appearance. Plus, it gives you a better idea of what else might need to be replaced or repaired to boost your curb appeal in other ways.

2. Repaint

You knew this one was coming. If the exterior paint on your home is looking a little worse for wear, we recommend a fresh coat of paint before you list your home. And if you don’t have the time or budget to repaint the whole exterior, consider making a statement by painting just your front door in an accent color.

3. Hang window boxes

Window boxes are long, narrow planters designed to showcase flowers or plants right below your window. You can find one that fits your style at most home and garden stores. Or, if you’re feeling crafty, gather up the supplies and build them yourself! Window boxes can add color, dimension, and charm to your home’s exterior and really dress up your outdoor space.

4. Don’t skip the landscaping

First things first, mow that lawn and prune your trees. And if the front of your house looks a little bare and boring, liven it up by planting flowers. We recommend perennials, not annuals, because perennials grow again in the spring without needing to be replanted. Annuals, on the other hand, must be replanted every year. Other factors to consider are the plant’s sunlight, shade, soil type, and water needs. It’s important to find out what kinds of plants would survive in your front yard and porch before you plant.

5. Hang potted plants and greenery

Speaking of plants, do you have a covered front porch? You could maximize that open space and hang planters from your porch ceiling. It’s a great way to improve your curb appeal and it adds dimension, drawing eyes upward. Get creative and hang planters of different colors, sizes, and shapes that reflect your home’s personality. Take the look a step further by planting draping greenery like ivy or pothos plants.

6. Give your mailbox a makeover

Paint your mailbox to match your front door. Plant flowers at the base of the mailbox post. Sand and varnish, repaint, or replace the post—the list goes on. There are countless ways to bring your mailbox to life and any one of these creative touches can make it stand out from the rest of the block. Just don’t go overboard personalizing it to the point that potential buyers couldn’t see it as their own.

7. Replace gutters and downspouts

Replacing gutters and downspouts might not be the most glamorous of updates, but it impacts your home’s curb appeal more than you might think. Even if your gutters don’t need to be fully replaced, cleaning and securing any areas that are not attached to the home properly will give your potential buyers one less thing to worry about in terms of the home’s functionality.

8. Replace hardware

From light fixtures to doorknobs to your address numbers, refreshing the finishes on your outdoor hardware can give your home an instant lift. This is also an easy DIY update that takes minimal time if you’re wondering how to boost curb appeal on short notice.

Any other tips on how to boost curb appeal?

Maybe the biggest rule of prepping your home for sale is to keep your decor choices—inside and out—neutral. Buyers should be able to envision the space with their own belongings and tastes, and that’s hard to do if your personal style is on display. When it comes to curb appeal, here are a few things to avoid:

• Lawn decorations
• Visible garbage/recycling cans
• Window decals

Sorry to your lawn gnomes, but it’s not their time to shine. For more tips on nailing your home sale or boosting curb appeal, reach out to our team anytime.

Whether you’re selling your home or you just want to put your best foot forward for your HOA, curb appeal can make a big difference in how your home is perceived.

The post How to Boost Curb Appeal in 8 Easy Steps appeared first on Cardinal Financial.

7 Home Staging Tips to Nail Your Sale

• Depersonalize
• Declutter
• Optimize lighting
• Choose a scent
• Set the table
• Increase your curb appeal
• Complete renovations

1. Depersonalize

One of the first things you need to do to stage your home is depersonalize. Take all your family pictures off the walls and remove any type of religious, political, or personal odds and ends that make your home feel lived in. Prospective buyers should be able to picture themselves living in your house. Additionally, stick to a neutral color scheme when it comes to the decorative accents you leave out.

Pro Tip: Selling during the holidays? You don’t have to miss out on decking your halls. Try these neutral winter decor ideas.

2. Declutter

Unless you’ve already moved into your next home, you still have to live in your current one while keeping it showing-ready. A deep clean every time your real estate agent brings someone over might not be sustainable, but at the very least you should maintain a decluttered environment. Decluttering can make your home appear bigger than it is, and generally help potential buyers envision how they might use the space. Before you list your home, move extra items to a temporary storage unit (or get rid of them altogether to speed up packing).

3. Optimize lighting

Lighting influences our mood more than we realize. In terms of home staging tips, the amount of light plays a big factor in whether somebody buys a home. A well-lit home can feel larger, cleaner, and more inviting when it’s being shown. To stage your home for sale, replace old light bulbs, clean your windows, open the blinds, and embrace the natural light.

4. Choose a scent

This one’s especially important if you have pets (or kids for that matter). If your home is carpeted, consider getting it replaced or deep cleaned before you list your house. You can sprinkle some baking soda to neutralize carpet odors as well. If you want to add a scented candle or oil diffuser to the mix, just make sure you choose something that’s not too overpowering.

5. Set the table

Don’t worry, there’s no cooking required for this home staging tip. You’re showing your home, not hosting a dinner party. However, setting the table is a welcoming touch that can make your house feel more like home—and help a potential buyer picture their own family living there. You can skip the cutlery, but a seasonal centerpiece on the dining room table is never a bad idea. 

6. Increase your curb appeal

When you’re selling your home, first impressions matter. That’s why curb appeal is important to consider when staging. At the very least, make sure your lawn is manicured and the exterior of your home is clean. If you’re selling during the holiday season, keep your outdoor decor neutral. Some warm-toned white string lights are always a winner. A flashing neon tableau of Santa gracing the nativity scene with his presence, on the other hand? Save it for next year.

7. Complete renovations

You don’t want to invest a large amount of money into a home just to sell it. Still, it’s important to finish up any ongoing projects before listing. Some common repairs include leaky faucets, damaged screens, and clogged drains. Anything that could deter a potential buyer from loving your home should be fixed. If you’re not sure which repairs to prioritize, check out our breakdown of what NOT to fix when selling your home.

Bonus home staging tips

Before you go, we’ve got a few more tips on how to stage your home for sale.

• Mount mirrors on your walls to amplify light and space
• Don’t shove everything in your closets, as buyers will likely be checking these spaces
• Give each room a purpose (that guest bedroom/home gym/office’s days are numbered)
• Incorporate house plants throughout

Your home can’t be everything to everyone, so don’t stress too much about incorporating every single piece of staging advice out there. Remember that these are just ideas, not requirements. The overall goal is simple: Help buyers see the potential in your home.

From interior decor to landscaping, the little details can make a big difference when staging your home for sale.

The post 7 Home Staging Tips to Nail Your Sale appeared first on Cardinal Financial.

What young home buyers want: 7 must-have home features

• Outdoor space
• Smart home features
• Home offices
• Stylish bathrooms
• Convenient storage
• Closed floor plans
• Eco-friendly design

1. Outdoor space

Raise your hand if you were living in an apartment during the 2020 Covid lockdowns. Anyone who experienced that knows having access to your own outdoor space is no longer something to risk going without. That doesn’t mean you need to spend thousands of dollars turning your backyard into a botanical garden, though. A fence around the yard for privacy or even a home location that offers easy access to local parks and trails is enough to fit what most young home buyers want.

2. Smart home features

Like it or not, technology is here to stay. Gen Z especially has grown up with technology as an essential part of life, so it’s only natural that their homes should reflect that. Some of the more popular smart home features for young buyers include thermostats, doorbells, and security systems.

3. Home offices

If there’s one thing Gen Z is going to do, it’s disrupt tradition—and the workplace is no exception. The old model of sitting in an office from 9 to 5 has lost its appeal for most young home buyers. With more and more Gen Z employees earning their income from home, a designated space to take care of business is a must if you’re selling to this generation.

4. Stylish bathrooms

Nobody wants to film a get-ready-with-me video in a boring bathroom. And on a more serious note, an outdated bathroom means a lot of money spent on renovations. While Gen Z actually tends to prefer more retro, classic home styles than the modern trends Millennials embraced, that doesn’t extend to the plumbing.

5. Storage space

Sorry, storage unit industry, but you’d be hard-pressed to find a young home buyer who considers remote storage a viable option. For one thing, why pay for storage that isn’t easily accessible? Your home is where your life is, so your stuff should be there, too. If there’s not enough storage space, Gen Z is likely to ditch belongings for the move. For a generation who typically makes more intentional purchases, that’s a big turn-off in a potential home.

6. Closed floor plans

Good news! There’s no need to knock down walls before you sell your home. Open floor plans had their moment, but what young home buyers want now are more traditional layouts. Whether it’s with friends, partners, or roommates, in the current housing market Gen Z isn’t likely to buy a home by themselves. With multiple occupants, the privacy and personalization that closed floor plans offer are a must.

7. Eco-friendly design

Gen Z cares deeply about the environment, so it’s no surprise that homes with eco-friendly features are a priority for them. While some factors (like your city’s recycling program) may be out of your control, there are still a few ways you can make your home greener—solar panels, LED lights, and water-conserving appliances to name a few.

The simplest way to make sure your home is energy efficient, though, is to keep up with repairs and maintenance. Proper insulation, clean HVAC systems, and correctly-fitted windows and doors all help minimize energy consumption and utility bills.

What young home buyers want: Bonus tips

Before you take this list of home features and run with it, it’s important to understand not just what Gen Z looks for in a home, but how they look for it. If you want to sell to Gen Z, you need to meet them where they are: Online. We’re not saying you have to become an influencer, but your home’s digital presence matters. Your listing should be verified on trusted sites, have high-quality photos, and provide enough detail that potential buyers don’t have to call you for more information. It’s also a good idea to work with a real estate agent who knows how to market your home on social media.

At the end of the day, don’t overthink what young home buyers want. They’re a different generation, not a different species. If you can provide a safe space to call home, you’re well on your way to a successful home sale with any buyer.

If you want to sell to Gen Z home buyers, you need to meet them where they are: Online.

The post What Young Home Buyers Want: 7 Must-Have Home Features appeared first on Cardinal Financial.

#1. Interest Rate 

Let’s cover one of the basics first. An interest rate is fundamental to all forms of lending. In its simplest form, interest is what you pay a lender to borrow money on top of your principal, or the original amount you borrow. While you’ll always pay back more than what you borrowed, a lower interest rate means you’ll pay back less “extra.”

A lot of things go into determining your specific interest rate, including the amount you’re borrowing, your down payment, your credit score and history, and the length (or term) of your loan. Oh, and market conditions. Market conditions can affect the environment around you—including whether or not you’re in a buyer’s or a seller’s market.

#2. Buyer’s/Seller’s Market

When you’re ready to buy a home, your real estate agent may tell you it’s either a “buyer’s market” or a “seller’s market.” The former, a buyer’s market, is better for you, the borrower, because it generally means there are more available homes than buyers, which means less competition and lower prices. The latter, a seller’s market, is more competitive—often leading to bidding wars and greater potential for losing out on the home you’ve had your eyes on due to increased competition.

In a seller’s market, where homeowners are looking for top dollar from buyers, it’s important to have a bona fide pre-approval from your lender. If you’re interested in knowing what you can afford to offer before you start your house hunt, get your free rate quote here. 

#3. Buydown

A buydown is related to both your interest rate and the market you find yourself in, and it allows borrowers to use cash to temporarily lower their interest rate for a set amount of time—usually one, two, or three years. For example, a 3-2-1 Buydown might allow you to lower your original rate by 3% during your first year of homeownership, 2% during your second, and 1% your third before going back to your initial interest rate.

How are buydowns paid for? There are different methods, but one of the most common is the application of seller or builder credits, issued at closing. So, for example, if your seller offers a $15,000 closing credit, you may be able to apply that cash to the purchase of a temporary buydown. In a high-rate environment or a buyer’s market, where sellers are under a little more pressure to sell, this option could save you thousands of dollars over the lifetime of your home loan.

#4. Closing Costs 

Speaking of closing credits, let’s go over closing costs. Closing costs typically include all of the different fees you’ll pay in addition to the price of your new home, like appraisal, attorney, escrow, and title fees, as well as credit report costs. More often than not, you’ll pay for those with one check at the end of your purchasing process (and they may be included in the same check you write for your down payment). 

A good lender can help you plan for those fees ahead of time to ensure you have the cash set aside when the time comes to spend it.

#5. Equity 

Equity is the overall value of your home, minus your remaining mortgage balance. Like interest rates, your home’s value may fluctuate over time with market conditions, but as long as you owe less than what the property is worth, you’ll have equity. 

Like interest rates, your home’s value may fluctuate over time with market conditions, but as long as you owe less than what the property is worth, you’ll have equity.

For example, if your home is worth $400,000 and your mortgage balance is $300,000, you’d have $100,000 in equity. You can increase your home’s value and subsequent equity by paying down the balance, or by remodeling or renovating the property. 

Did you know that a mid-range kitchen remodel has a return on investment of almost 60%? According to Zillow, a $64,000 remodel can add almost $38,000 of value to your home. 

For additional ideas, check out another of one of our recent blogs, The Renovating a House Checklist You Absolutely Can’t Skip.

#6. Loan-to-Value (LTV) 

LTV, or loan-to-value, is a ratio used to describe the overall size of your loan versus the value of the home you’re buying. It will always be expressed as a percentage and comes from dividing the loan size by the home’s value. LTV is critical in determining your loan options, borrowing power, down payment, and whether or not you’ll need to pay private mortgage insurance (PMI).

Some home loans will require an LTV of 97.5%, which means you’ll need to put down just 3.5%. Other home loans require an LTV of 95% or less, which will require a higher down payment. Remember this general rule of thumb: The higher your down payment, the lower your LTV. 

Remember this general rule of thumb: The higher your down payment, the lower your LTV. 

#7. Debt-to-Income (DTI) 

DTI, or the debt-to-income ratio, is the percentage of your gross monthly income that’s used to pay monthly debts, and it helps lenders determine how much of a risk you are. Borrowers with a low DTI are generally seen as better with money management, and therefore less risky. The exact formula for calculating front-end DTI is:

DTI = (Expenses ​/ Gross Monthly Income) x 100

DTI is often split into two forms: Front-end and back-end. 

• Front-end DTI compares the cost of your living expenses (i.e. rent or mortgage) to your gross monthly income.
  • If your mortgage payment is $1,500 and your gross monthly income is $6,000, your front-end DTI would be 25%. 

• Back-end DTI includes other financial obligations, like credit card payments, student loans, car payments, child support, alimony, and more.
  • If your monthly debts amount to $825 and your gross monthly income is $4,750, your back-end DTI would be 17%. 

So what’s a “good” debt-to-income ratio? We cover that in depth in this blog, but a lower DTI is always better. Different mortgages have different debt-to-income requirements, and lenders may have additional requirements beyond that to help mitigate risk. 

#8. Funding Fees

Funding fees, like closing costs, are fees that borrowers pay to fund the loan and protect lenders from loss. Government loans like VA and FHA loans have funding fees, but those may be waived depending on individual loan circumstances. Your loan originator can help you find out if waivers are available for your specific loan type.

#9. Loan Originator

Speaking of loan originators, these professionals are different from mortgage brokers, because they’re representatives of the financial institution that’s helping buyers with the mortgage application process. A mortgage broker, on the other hand, is a licensed professional who works on your behalf to secure financing. 

Basically, a loan originator works for a lender and a broker is an independent agent. 

#10. Underwriting 

Once your application is complete and submitted (but before you get keys at the closing table), you’ll go through underwriting. Underwriting is the process lenders use to assess an applicant’s income, assets, credit, and risk. 

During this process, lenders comb through your personal information and financial records to determine whether or not you qualify for a loan. They’ll determine your LTV, your DTI, your interest rate, and your closing costs, so it’s important to get your affairs in order well ahead of time to ensure the process isn’t held up. 

Did these mortgage definitions help you better understand the mortgage process? Is there anything else we can clarify for you? Let us know on social media, check out our full glossary, or get in touch with one of our experts for more information. We’re always here to help!

The post Home Buying, Defined: 10 Mortgage Definitions You Need to Know appeared first on Cardinal Financial.

Should I buy a house? 10 reasons to say “Yes”

• Long-term stability
• Room to grow
• More privacy
• Control over your space
• Consistent budgeting
• Ability to build home equity
• More potential tax benefits
• Opportunities to grow your credit score
• Unique financing options to fit your lifestyle
• Potential to refinance for better terms down the line

1. Long-term stability

If you’re not ready to put down roots, renting can often be the best fit for you. But when you find the place you can see yourself living for the long term, you can’t beat the stability of homeownership. Depending on your loan terms, a mortgage is typically a 15 to 30-year commitment. Even if you sell your home before the mortgage term is complete, it takes at least a few years of staying put for your home loan to be a good investment. That’s years of getting to know your community, settling into your space, and not living with one foot out the door wondering where you’ll live next.

2. Room to grow

Kids. Pets. Plants. Whatever you want more space for, owning a home can deliver. And while apartments are limited to the square footage on your lease, your home has the potential for additions and renovations when your needs change (and if you do decide to renovate, there’s a loan for that).

3. More privacy

Sharing a wall with neighbors is, as the kids say, “not it.” One of the biggest benefits of owning a home is the privacy of a space that’s truly yours, both indoors and out. Especially with more people working from home, having your own quiet, dedicated space is a game changer.

4. Control over your space

One of the biggest downsides of renting is having to leave the space as you found it when you move out. You also have to adhere to the landlord’s policies. When you own your home, you can decorate it however you want, fill it with as many pets as you want, and generally make it feel like home. Just keep in mind that if your neighborhood has an HOA, they may have a few guidelines you’ll need to follow.

5. Consistent budgeting

If you’ve been renting long enough, you’ve probably noticed that rent rises every time you renew your lease. Between that and miscellaneous amenity fees and utilities, it can be hard to budget consistently when you rent. With a fixed-rate mortgage, you can rely on the same monthly payment due every time, until you pay off the loan or refinance for a new rate.

6. Ability to build home equity

This is one of our favorites. Home equity is the amount of your mortgage that you’ve paid off. In other words, the percentage of your home that you own. Unlike monthly rent, every payment you make on your mortgage gets you closer to paying it off entirely, all while your home equity keeps accumulating. And even though renovations may seem expensive upfront, those actually boost your home equity, too. If you need to, you can also leverage your home equity for more flexible funds with a cash-out refinance.*

7. More potential tax benefits

Taxes aren’t anyone’s favorite subject, but you’ll want to hear this one. When you switch from renting to homeownership, you could potentially qualify for more tax benefits like:

• Mortgage interest (applies to the interest paid on the first $750,000 of your home loan)
• Discount points (pre-paid interest on your mortgage)
• Property taxes (exact amount depends on where you live)

How much you can actually write off will depend on your unique financing situation.**

8. Opportunities to grow your credit score

Not only are there plenty of home loans that don’t require a high credit score, but each monthly payment you make helps improve your credit history. You can even leverage that healthier score down the line to get better terms when you refinance your mortgage. Win-win.

Pro Tip: Got credit challenges? We’ve got strategies to help you navigate them here.

9. Unique financing options to fit your lifestyle

Rent is, well, rent. Not much about it changes regardless of your circumstances. When you apply for a home loan, you can choose from a wide variety of mortgages that are actually built for your unique goals. For example, many first-time home buyers enjoy the flexible down payment and credit requirements that FHA loans offer. If you’re not quite ready to take on a house, a condo loan is a great way to transition. And if you qualify, VA loans offer some of the best benefits around.

10. Potential to refinance for better terms down the line

Even though a mortgage is a big commitment, it’s actually more flexible than you think. The rates you have now don’t necessarily have to be the rates you have forever. As you build home equity and credit, you can eventually leverage that to refinance your loan for different rates or cash out. You can even refinance to a different mortgage type altogether (from FHA to Conventional loan is a popular route).

Are there any reasons I should NOT buy a house?

The answer to “Should I buy a house?” really comes down to whether or not the timing is right for you. A mortgage can involve more upfront costs than renting, and a home loan application is a lot more involved than applying for a rental. When you own, you’re also responsible for any maintenance issues that arise. So, if the flexibility of renting still outweighs the commitment of a home purchase, now might not be the right time for you. Just remember that even if you’re not looking to buy a home now, it’s never too early to start planning for it.

*Using your home equity to pay off debts or make other purchases does not eliminate the debt or the cost of the purchases, but rather increases the loan amount of your mortgage to be paid according to your new mortgage terms.

**This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before making the decision to buy or refinance a home.

The post Should I Buy a House? 10 Benefits of Owning a Home appeared first on Cardinal Financial.

Spring has sprung, the flowers are in bloom, and the curbs are becoming more and more appealing by the day. Must mean it’s house hunting season. So, if you’re a first-time buyer, you’re going to want all the house hunting tips available to help snag your first home while fighting off all the other first-time buyers.

Don’t worry, with the right advice in hand, buying in a competitive market can be easier than you think. Conquer your homeownership goals with the following house hunting tips for first-time home buyers, curated by yours truly.

Tip #1: The right real estate agent can make all the difference.

When you’re ready to buy a house, it’s important to have the right people on your side. Friends and family members are a good start, and the right lender can help make sure you’re ready financially. But a real estate agent? A good agent makes all the difference. 

Consider this: A lot of people think of real estate agents as glorified tour guides. They unlock doors, they show you around, they answer questions, and that’s it…right? Wrong. 

A solid real estate agent (preferably a Realtor®—otherwise known as a certified agent who’s part of the National Association of Realtors) is half friend, half negotiator. They’re going to have your back through the home buying process, and they’ll spend much of their time scouring listings to find homes that fit your wants and needs. In fact, they’ll be able to search through listings you can’t even find on the most popular listing sites. Most importantly, they’re the ones who read through the contracts to make sure you’re getting a fair shake. 

Tip #2: Don’t get (too) attached. 

House hunting can feel like a roller coaster of emotion, and you’re probably going to fall in love with a lot of homes. Our next house hunting tip? Don’t get too attached to what you see online or in person. Sure, the listing pictures may knock your socks off, but remember that those homes are often professionally staged. 

As for in-person viewings? Remember that any home you put an offer on should be professionally inspected anyway, because you never know what that fresh coat of paint is hiding and you may not have immediate access to things like attics and crawl spaces. Looks can be deceiving either way, so don’t forget that most of the homes you’re seeing are staged to sell—not staged for the realities of life. 

Most of the homes you’re seeing are staged to sell—not staged for the realities of life. 

When starting out on this journey, the best thing you can do is come to terms with the notion that the first homes you look at probably won’t be the ones you buy. Use this as an opportunity to take notes on what you like and what you dislike, and compare other homes to that list. 

Tip #3: Waving the red flags.

When you do start attending open houses and scheduling private walkthroughs, there are are several factors to consider that might be so obvious. To sum up our next house hunting tip, here’s a short list of things to keep an eye (or a nose) out for:

• Bad smells: These can be indicative of backed-up sewage lines, hidden mold, garbage, or pests. When it comes to funky odors, trust your gut. 
• Humidity: If you can, get a humidity reading in basements and crawls, and keep an eye out for signs of moisture. Brown or yellow spots in the ceiling and bubbled wallpaper or drywall could indicate leaks in hidden areas.
• Craftsmanship: Look closely at corners, edges, and lines to make sure everything lines up. Look for bows, cracks, jams, and scratches, as those could be signs of poor worksmanship. And don’t forget to make sure doors and drawers close correctly. 
• Surroundings: People love to look at the home, but they often forget about the surroundings. Is the home located on a busy street? Near a church bell? Do the neighbors have dogs? We’d hate for first-time buyers to have buyer’s remorse because they forgot about the sights and sounds around the home.
• Perspective: Online listings have a habit of making spaces seem larger than they actually are. Rooms that once looked huge online turn out to be little more than the size of a coat closet. Perspective is everything, so don’t let that wide-angle lens fool you. 

Tip #4: Do your homework.

Your agent is going to take you to see plenty of homes, but you should also take the initiative to see some homes on your own time. If not by attending open houses by yourself (or with your partner), then at least by (safely) staking things out during off-hours. What’s the traffic look like at 2:00 PM on a weekday? What’s it like at 10:00 PM on a Saturday night?

These kinds of impromptu visits to homes or neighborhoods you like on the surface can reveal far more than a typical house tour, and could help narrow your selection or eliminate some options entirely. Ultimately, the more you see, the better off you’ll be. 

Impromptu visits to homes or neighborhoods you like on the surface can reveal far more than a typical house tour, and could help narrow your selection or eliminate some options entirely.

Tip #5: Get pre-approved.

If, by chance, you do stumble upon your dream home at any point in the house hunting process, you’re going to want to put in an offer. 

These days, offers backed by a lender’s pre-approval carry more weight than your standard pre-qualification (which is nothing more than a statement saying what you might be able to afford). A pre-approval is a bonafide, verified review of your qualifications—your income and your credit score, for example. Plus, it tells sellers that you’re serious about moving forward. 

Tip #6: Patience, patience, patience.

They say it’s a virtue, but it’s also a totally necessary house hunting tip for first-time buyers. Impulsivity leads to mistakes, and mistakes lead to regrets. The process can be unpredictable and time-consuming, but your agent and your lender should help provide a smooth, seamless process that gets you to the closing table in no time and with no regrets.

And now that you know how to house hunt, you’re ready to start the next chapter of your life!

The post House Hunting Tips for First-Time Home Buyers appeared first on Cardinal Financial.

In this blog:

• Cost comparisons
• Timing differences
• Labor needs
• Customization opportunities
• Financing options

New Build vs. Renovation: Costs

Like many big decisions in life, choosing between building a new home or renovating an existing one may come down to your budget. As you might expect, it usually costs less to renovate than build. New build costs will include the land you’re building on, plans, permits, materials, labor, and more depending on how customized you want it to be. 

Renovation costs are largely going to come from materials and labor. According to Forbes, the average cost of building a home is $150 per square foot, while the average cost of renovating is $100 per square foot. Of course, the price depends on many different elements like where your home is located, the materials you choose, and your floor plan.

Pro Tip: Whether you build or renovate, you can simplify budgeting with specialized home loans. More on that later.

New Build vs. Renovation: Timing

Building a house takes time, with just how long depending mainly on the level of customization and the area you’re building in. The average construction time for a custom home is about 9 months. Extreme weather conditions (like triple-digit summers in the south and harsh winters in the north) can also cause delays.

You know those home renovation shows where they give the space a complete makeover in one weekend? That’s not how actual renovations work. It may take months to complete what you have in mind. On the plus side, you can tackle your projects one at a time so that you don’t have to pay for everything (everywhere) all at once. This also means you’ll likely be able to live in your home while renovations are ongoing, saving you the expense of a temporary place to live until they’re complete.

New Build vs. Renovation: Labor

When it comes to new build homes, building them is actually the easy part. Labor will be one of the lower costs in your new build budget, but there are several different players involved in the process. Your experience may vary, but you can typically expect to work with:

• An architect
• A builder
• Trade contractors
• Inspectors
• Lenders

For renovations, labor will likely be your biggest expense. Especially for more complex projects like replacing plumbing or HVAC systems, you may need to bring in specialized contractors for different stages of the job. For surface-level updates like new floors and finishes, your labor costs will be lower as the work generally requires less time and skill.

New Build vs. Renovation: Customization

The biggest perk of building a new home is being able to customize it however you like (or however your budget allows). You can make a place your own with renovations, but there’s still only so much you can change with fresh paint and new cabinets. If you’re not planning to be in your home for the long haul, though, renovations are probably a smarter investment. No need to spend more time and money on custom elements that you won’t be in the home to enjoy down the line.

New Build vs. Renovation: Financing Options

We’ve talked about the costs of building vs. renovating, but how about the ways you can actually cover those costs? There’s good news on that front: You can choose from a variety of funding options that allow you to leverage your mortgage to fund your projects.*

*All product guidelines are subject to change, so please consult your loan originator for qualifying details specific to your home loan criteria.

Pro Tip: To qualify for these specialized renovation loans, your projects will need to be done by professionals. If you’re more of a DIY type, a cash out refinance or HELOC (home equity line of credit) could help you leverage your equity to finance home upgrades.

So, is it better to renovate or build new?

New build vs. renovation is a decision that comes down to your unique homeownership needs. There’s no “right” answer, but these guidelines should help you find the one that best fits your goals.

It’s better to build new if:

• You don’t plan on moving again or for awhile
• The ability to customize is your priority
• You already own land to build on
• You have access to other living arrangements for the duration of construction

It’s better to renovate if:

• You’re likely to move again in the next few years
• Budget is your priority
• You live in an area with limited access to labor, materials, and good building conditions
• You need to move in as soon as possible

And remember, if it feels overwhelming or you’re not sure where to start, our team is here to help.

The decision to build new or renovate a home ultimately comes down to your budget, your location, and your move-in timeline

The post New Build vs. Renovation: How to Choose Your Best Fit appeared first on Cardinal Financial.

Getting Started

Building a home isn’t as simple (or as fast) as it appears in those home renovation shows. Teams don’t just show up with a truckload of 2x4s and some concrete. It takes time and coordination to do it right. When going custom, you typically have two “ins,” one of which is far easier than the other. 

Congratulations, whether you’re a first-time owner or someone who’s getting around to building the custom home you’ve been working for your whole life, you’re about to embark on an exciting process.

Option one? Go with a builder that already owns a plot of land and is selling empty lots for your future home. These are typically planned neighborhoods that you’ll have limited control over. You go in, pick a lot, select your finishes, and get financing. It’s straightforward and easy, but doesn’t allow the versatility that a fully-custom home likely would. After all, these planned neighborhoods usually feature set, blueprinted styles and more affordable materials.

Option two? Secure your own lot and hire an independent builder to build a custom home from foundation to finishes. This route is more involved, but grants the buyer (that’s you) more control over the process. 

Custom Construction Loans

Let’s say you opt for option two. In this choose-your-own-adventure story, you’re again looking at two routes:

1. You need a plot of land to build on. Unless you already have one, you’re going to need to buy one. You could obtain separate mortgages for both the land and the construction, but this requires two applications, two underwritings (which means double the credit hit), two closings, and will result in two mortgage payments. 
2. Alternatively, you can go for a one-time close loan. This accessible loan type allows you to bundle the purchase of the land and the labor into one loan. That’s one down payment, one closing, and one mortgage payment. If this option sounds like a better fit, get in touch with one of our experts to discuss the ins and outs of one-time close loans.

Looking Ahead

Next up? A whole host of steps…

Plans

If you’re hiring an independent builder, they may have existing home plans you can choose from. If not, or if you’re looking for something different, you can purchase new plans. Heads up, though: new plans may cost you, but it’s up to you to decide how the cost compares to the outcome. 

For pre-drawn plans, expect to pay upwards of $2,000 or more. For custom floor plans that allow you to map out pretty much every aspect of your home, expect to pay upwards of $10,000 or more. Note: These price points are estimates based on industry norms, but the exact cost will vary depending on the builder you choose.

Builders

When picking a builder, you’re going to want to do your research. Contractors can sometimes get a bad wrap for skipping out on work or using cheap labor and materials, but that’s not always the case. Our advice? Read as many reviews as you can, seek out referrals, and interview multiple builders before selecting one that you feel is equipped to build your dream home. 

Permits

Permits are required for just about every part of the construction process, as are inspections for the work being completed. Adding gas lines? Permit. Grading a yard? Permit. Wiring? Permit. They can be time-consuming and expensive to obtain, but they’re vital because they often require plans. Plans are beneficial because they show that your builder has the professionalism and foresight to hit deadlines and keep the project moving forward. 

Construction

When your team is ready to build, here’s a rough idea of the process you’re looking at, from start to finish:

• Preparation (grading, leveling, etc.)
• Foundation (crawl space vs. slab)
• Framing
• Rough plumbing, electrical, and HVAC
• Siding, roofing, and insulation
• Drywall and fixture installation
• Countertops and flooring
• Finishing touches
• Final walkthrough

Inspection

Not only will local and state officials come through to verify your home’s work is up to code, this is also your chance to look for anything you want taken care of before signing off.

Here, nothing is too small to bring up to your builder. Sure, things will settle over time, but you’ll want to keep an eye out for drafts, leaks, flickering lights, doors that aren’t level, and consistent paint coverage. Not sure about something? Ask your builder. 

After all, this is your home, your expense.

Building Is Great Because…

While building a house might be more complicated than buying an existing home, it comes with its own set of benefits. For starters, what’s not to love about whole-home customization? We’re talking location, layout, lighting, flooring, fixture finishes, equipment…everything. 

With that customization, you get access to new options for energy efficiency, meaning your new construction home can help you save on bills while saving a little bit of the environment. And, because you’re building from the ground up, you face little to no competition with the rest of the housing market.

Downside? The COVID-19 pandemic continues to have lasting impacts on the industry, meaning lead times are longer and materials are more expensive. Speaking of expenses…

The Cost of Building

Details vary, but Architectural Digest reports that building a house can cost anywhere from $500 to $1,000 per square foot depending on location. Meanwhile, American Home Shield’s 2022 American Home Size Index shows that the average size of a house in the United States is roughly 2,500 square feet. 

Crunching the numbers shows us that building a house that size can cost anywhere from $1.2 to $2.5 million—averaging out to $1.875 million. 

If that number caused your jaw to drop, take this bit of solace: Other resources pin the average cost of a custom, similarly sized home at roughly $500,000—just a little north of the average “sold” price of a home in 2022. 

What’s it all come down to? When building a house, your location, equipment, and finishing touches will push your costs up or down. The safe bet is to leave some cushion in your budget, just in case. Even safer? Get pre-approved for construction loan financing with a lender you trust (ahem, we know one).

The post What To Expect When Building a Home appeared first on Cardinal Financial.

First impressions are everything, and a picture is worth a thousand words. These old adages ring especially true for home listings with professional real estate photos. In fact, studies show that purchasers actually care more about the pictures than any other part of the listing. 

According to the National Association of Realtors, 97% of buyers used the internet when searching for a home in 2020. Additionally, more than half of buyers found the homes they purchased on the internet, and 98% of respondents said photos were either “very useful” or “somewhat useful” in their search.

Studies show that not only is an online listing a powerful tool in selling a home, home shoppers actually care more about the photos than any other part of the listing.

The competitive advantage of professional real estate photos.

Since so many home shoppers either start their search online or use online listings, it’s important to catch their interest there first. What you show online should make them want to come see it in person. People have busy schedules, so make it worth their time. Think of it as if the online listing is the first date, and the tour or open house is the second date. A good first impression could lead to a second date. 

If you use technology to your advantage and hire a pro to get the job done right, it can be worth the investment. A professional real estate photographer can provide you with several options to help beef up your listing, including drone images and video or virtual tours.

It’s about quality.

If you want professional real estate photos, you have to do it right and hire a pro. A professional real estate photographer (or a professional photographer with real estate experience) will know how to get the job done right and fast. That’s because they have the tools, equipment, software, and most importantly, the experience necessary to do so. Plus, they’ll know how to stage the room, position the camera for the best angles, and edit for the best light. 

Poor quality photos will do more damage than you think. Even if you get them to come to your open house, they’ll think back on the first impression your listing photos left.

…And it’s about quantity.

If you think this is a quality-over-quantity thing, think again. When it comes to professional real estate photos, quality and quantity go hand in hand. Buyers want to get a feel for the home before determining if it’s worth their time to see it in person. A digital walkthrough, through either photography or virtual tour (or both), can help.

Having numerous high-quality, professional real estate photography shows that you were thorough. A handful of low-quality phone pictures? Yikes. Many buyers won’t even give your home a chance because you didn’t give them enough to pique their interest. A professional photographer knows this and can give you your money’s worth with a wide selection of top-notch listing photos. 

Bang meets buck.

Need more proof that professional real estate photos are worth your dollar? One Redfin study found that home listings that feature professional real estate photos sell faster and for more money. In fact, sellers who chose this route made an average of $3,400 more for their properties. That same study stated that professional photography helps homes sell faster than those without. 

Ready to get started?

Okay, so you’ve decided it’s time to bring in the pros. Is there anything you can do to help? Absolutely. To prepare for the photographer’s visit, clean up, simplify, and depersonalize your home. Home buyers want to picture themselves living there, so try to make your home as clean and neutral as possible. This will give the photographer a nice canvas to work with and should help the photography session go more smoothly. 

A professional real estate photographer can provide you with several options to help beef up your listing, including drone images and video or virtual tours

The post Sell Your Home Successfully with Professional Real Estate Photos appeared first on Cardinal Financial.