Depending on the date of closing, the amount of property tax that a homebuyer and seller are responsible for will vary. The process of figuring out who pays how much is called tax proration, and it’s one cost that many buyers overlook when calculating their cash to close.

What is tax proration?

Tax proration is when property taxes are fairly divided between buyer and seller based on the date of ownership transfer or closing.

Simply put: Tax proration helps level the playing field. Property taxes on homes are often billed at the beginning of the calendar year for the year prior. So in 2024, you’d get a property tax bill for 2023. Let’s say you bought and closed on a home in November 2023. Should you be responsible for the property taxes owed on that home for the months before closing? Didn’t think so. Enter tax proration. 

Tax proration involves a bit of math to figure out how much of the bill each party is responsible for. Here’s where it gets more complicated: Homeowners (or the sellers) don’t typically pay their part of the property tax bill directly. Depending on the date of closing, or the particular situation, you have a couple of payment options to consider.

How to pay property taxes with tax proration

Tax proration pro-tips

Before you close on your home, keep these three tips in mind.

• Leverage: Depending on the market, the property tax bill could be used as leverage. In a seller’s market, where there are tons of competing bids, motivated buyers might offer to pay the seller’s portion of property taxes to get a leg up on the competition or expedite the sale. In a buyer’s market, the seller might offer to pay the entire property tax bill in exchange for coverage of other closing costs.
• Exemptions: Age and disability status could come with tax implications, for yourself or the sellers. Those implications affect tax responsibility. For example, perhaps the seller is a disabled senior citizen. Local laws might have provided relief for that person—relief that is unlikely to be passed on to the buyer. Communicate with your team to determine potential roadblocks.
• Projects: New builds, rehabilitation, and renovations will result in different tax assessments. New builds may not have received a tax assessment at the time of closing, and since there was no previous owner, the buyer would be responsible for an entire year’s worth of taxes. Rehab and renovation projects increase a home’s value, which could result in an increased tax bill. Make sure your assessment is up-to-date to avoid any surprises.

How to pay property taxes post-proration

After you’ve calculated and paid your initial prorated tax bill, you’re responsible for annual state and local property taxes for as long as you own the home. You may be able to deduct those property taxes (up to a certain amount) when it comes time to file your tax returns. Individually, you can deduct up to $5,000 in property taxes. Filing jointly? Double that figure and enjoy a $10,000 deduction.

Keep in mind that property taxes vary depending on where you live and other factors, so there’s no single correct way to go about it. Consult a tax professional, do your research, and don’t take shortcuts as you take on this part of homeownership. Ok, now that we got the serious part out of the way: Deep breath. You’ve got this!

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 Tax Proration: How to Pay Property Taxes Like a Pro appeared first on Cardinal Financial.

7 Tips for Buying a House in Fall

• Understand your credit score
• Prepare for your down payment
• Get your paperwork in order
• Budget for renovations
• Hold off on the holiday shopping
• Stay flexible
• Get a head start on tax season

1. Understand your credit score

These days, there are more loan options than ever that offer flexible credit requirements. A higher credit score typically means lower rates, though. So while a perfect score isn’t necessary, it’s important to understand what you can do to keep your credit healthy and lower your homeownership costs.

The best way to get the full picture of your credit score is to pull a copy of your credit report from one of the three major reporting agencies (Equifax, Experian, or TransUnion). You can do this by visiting AnnualCreditReport.com. Each reporting agency calculates your score differently, and not all creditors report to all three bureaus. While they may vary slightly, they all consider factors like account age, payment history, balances, and number of accounts.

Pro Tip: Try these tips to get your credit where you want it.

2. Prepare for your down payment

Did you hear the one about putting 20% down? It’s a myth. Realistically, the average home buyer just doesn’t have 20% of their home’s purchase price readily available. Some loan types have down payment requirements as low as 3%. Some, like VA and USDA loans, require no down payment at all. Still, there’s no denying that putting down more upfront can help you qualify for better loan terms. As you get ready to buy a house in fall, crunch the numbers to determine how much down payment is realistic for you. Try to aim for at least 10% down if your credit score is below 580.

Pro Tip: Get the full explainer on down payments with our free guide.

3. Get your paperwork in order

Buying a house in any season means paperwork. Most lenders will ask for documentation covering your income, taxes, and more when you apply for financing. Getting all that information together before starting the application process will save you a lot of time and stress. 

Plus, you can use that documentation to get pre-approved and make a stronger offer on your home.

4. Budget for renovations

In today’s market, you’re unlikely to find a home in your budget that meets all of your expectations perfectly. Renovations are almost a given for most people who buy a house in fall. And with colder weather already rolling in, you may not be able to delay home projects like HVAC repairs, new windows, or updated plumbing. So, if you plan to buy a house in the colder months, make sure your budget allows for renovations that need to be addressed immediately.

5. Hold off on the holiday shopping

Good news: You officially have an excuse to put off holiday shopping until the last minute. Why? Big purchases can impact your credit score and debt-to-income ratio (DTI).* Those numbers help determine your loan terms. So, if you apply for home financing and then make a big purchase before closing, your lender will likely need to update your application with your updated finances.

*DTI is the percentage of your gross monthly income spent on debt payments. Mortgage lenders add current debts to projected mortgage payments to help determine loan qualification and usually like to see the debt percentage below 40%. 

6. Stay flexible

Fall weather can be unpredictable. From showings to moving day, your plans may have to change on short notice. As with any home purchase, it’s important to stay flexible and keep your eye on the prize: A place to call home for the holidays.

7. Get a head start on tax season

One of the biggest perks of homeownership is the tax deductions* you may qualify for. To make sure you don’t miss out on any write-offs, get everything you’ll need in order as you’re finalizing your home purchase and moving in. With your mortgage fresh on your mind, you’re a lot less likely to miss important details or lose track of necessary documentation. Plus, if you have any questions about filing taxes as a homeowner, your real estate agent and lender might have tips.

*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.

If you buy a house in fall, make sure you understand your credit score, budget for renovations, and avoid big holiday purchases until after closing.

The post Buying a House in Fall: 7 Tips to Keep it Simple appeared first on Cardinal Financial.

Is fall a good time to buy a house? Six reasons we say “yes”

• Fewer competing offers
• More motivated sellers
• More flexible mover availability
• Changing weather
• Potential tax breaks
• Save on home goods

1. Fewer competing offers

The warm months are the busiest time of year for buying a home. Especially in a seller’s market, this means you’ll be bidding against more offers. In the fall, you’ll have less competition. Plus, your real estate agent will likely have fewer obligations to other clients when summer is over. That means more time to devote to your home search.

Pro Tip: If you do find yourself in a bidding war, our bidding breakdown can help you win.

2. More motivated sellers

By fall, peak selling season is over. With fewer offers on the table, sellers are usually more motivated to accept yours to get the listing off the market before the holidays. This situation gives you an edge to negotiate a better price.

3. More flexible availability for movers and other involved parties

Post-summer is the slow season for moving companies, too, so you may be able to get settled into your new home with more flexibility and lower costs. Your lender will also likely have fewer loans on their plate in the fall. That means you may be able to get through the mortgage process and close on your home faster than you would in busier seasons.

4. Changing weather

Fall is also a good time to buy a house because the weather is less predictable. This gives you the opportunity to see potential homes in less-than-ideal conditions. Not only can this help you negotiate terms with the seller, but you’ll also have a clearer picture of what you can expect from the home year-round.

5. Potential tax breaks

While you can’t avoid paying taxes, becoming a homeowner can qualify you for more deductions.* Even if you close on your home as late as December 31, you could be able to deduct:

• 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)

Depending on your unique circumstances, more deductions may also be available.

6. Save on home goods

If you’re like most people, you probably got rid of a lot of belongings before your move. Now, it’s time to replace them and make your new house a home. Fall can be a great time to buy a house because it’s followed by seasonal sales like Black Friday, Cyber Monday, and end-of-year warehouse clearances. Once you’re moved in, you can find decor, furniture, appliances, and more for lower prices than you might in the spring or summer. It’s no secret that buying a home can cost quite a bit upfront, so any opportunity to save can make a big difference in your finances as you head into the new year.

So, is fall a good time to buy a house?

There are a lot of reasons to buy a house in the fall, but there’s no such thing as perfect timing. A cold-weather home purchase typically means fewer available listings, the risk of weather hazards on move-in day, and less time to get settled before the holidays hit. And if you have kids, moving during the school year can be a difficult transition. The right time to buy a house is different for everyone, so don’t feel pressured to make it happen on anyone’s timeline but yours. Whenever you’re ready, we’re here to help.

*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.

A fall home purchase means less competition, more motivated sellers, and potential deals on home goods for your new space.

The post 6 Reasons Why Fall Is a Good Time to Buy a House 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.

The Essential 7-Step Home Closing Checklist

• Set a date
• Confirm what you need to bring to closing 
• Review your closing documents
• Complete your final walkthrough
• Get your closing funds ready
• Attend your closing appointment
• Make your move

1. Set a date

The first step in your home closing checklist is pretty self-explanatory. Once you’re approved for financing, your lender will reach out to schedule a closing date. Who needs to be at closing? It varies, but you may want to have your real estate agent, your closing agent, your lender, the seller, and any other borrowers on your loan present at closing. Oh, and you. That’s a big one.

2. Confirm what you need to bring to closing

Once you’ve set your closing date, get in touch with your real estate agent or mortgage lender to confirm everything you’ll need to bring to closing. Some common items include:

• A form of government-issued ID
• Payment for your closing costs
• Proof of homeowners insurance

Typically, your finalized closing documents will be provided for you to sign at closing. More on closing documents next.

3. Review your closing documents

Your lender is legally required to send you your closing documents at least three business days before your closing date. Don’t wait until the last minute to review them, though! Take as much time as you can to comb them thoroughly for any spelling errors, math mistakes, or unexpected fees. If you find errors in your closing documents, make sure to let your lender know as soon as possible so they can correct the mistakes. And if you have any questions about closing or the documents involved, now is the time to ask.

4. Complete your final walkthrough

About 24 hours before your closing date, you and your real estate agent will have the opportunity to walk through the home and make sure everything is aligned with what you’ve agreed to purchase. This could include a lot of easy-to-forget details, so we recommend bringing a final walkthrough checklist along to ensure you don’t miss anything that matters to you.

• Check locks on windows, doors, and gates
• Make sure windows, doors, and gates open and close properly
• Confirm appliances are functional
• Check for mold (especially in damp areas like under sinks)
• Test all electrical outlets
• Test the thermostat and HVAC system
• Check floors, walls, and ceilings for damage
• Look for signs of pests, like mice and ants
• Make sure the irrigation system is functional
• Make sure all agreed-upon repairs have been completed

5. Get your closing funds ready

Whether you’re paying by cashier’s check or wire transfer, make sure you have your payment ready to go before closing. If you’re transferring funds from a different account, don’t forget to leave enough time for the transaction to process before your closing date.

6. Attend your closing appointment

Today’s the day! Gather up your documents and meet at the closing table. Plan for the appointment to take up to two hours. During the appointment, you’ll sign your closing documents, pay your closing costs, and get your keys. Feels good, doesn’t it?

7. Make your move

The house is yours, and now it’s time to move in. Whether you’re moving across the country or across the street, it’s always best to have a game plan for moving day. Are you hiring movers or calling in a favor with friends? Where will your pets be while your belongings are being moved? When does your mail need to be redirected to your new address? The more questions you have answered before moving day, the less stressful your move will be.

Pro Tip: Nail your move with this handy checklist.

Understanding the closing timeline

With all these steps involved, you’re probably wondering just how long it takes to close on a home. A lot of factors determine the closing timeline, including how complex your loan is, how many loans your lender is processing in addition to yours, and the seller’s move-out schedule. In general though, it takes 30-45 days to close. If you’re anxious to get through it, there are a few strategies you can try to move the process along faster:

• Get pre-approved before making an offer
• Agree to buy the house as-is
• Avoid making any big purchases until after closing

Remember, buying a home is a big commitment. Don’t rush the process and miss out on potential savings and peace of mind along the way. Between your home closing checklist, your final walkthrough checklist, and your moving checklist, you’re more than prepared to close on a home, the right way. Ready to get started?

Getting pre-approved, buying your home as-is, and waiting until after closing to make big purchases are all good ways to get through your home closing checklist faster.

The post The Essential Home Closing Checklist appeared first on Cardinal Financial.

If you’re a first-time home buyer, you’ve probably heard about the negotiations, or “bidding wars,” that happen at the beginning of the purchase process. Fewer people, however, are aware of the negotiations that follow the signed purchase contract.

Although home inspections have become less popular over the last few years, they’re still commonplace in the real estate industry. When those inspections uncover one or more problems with the home, buyers and sellers have to agree on who will cover the costs. Here are four tips to help you come out on top when negotiating repairs after home inspection.

Ask for a credit.

Let’s be real, the sellers are on their way out both physically and mentally. If it’s looking like you’re going to complete the purchase and close, they’re probably more focused on packing than they are fixing.

If sellers aren’t amenable to making home inspection repairs—or if those repairs weren’t made to your satisfaction—you could go through the hassle of negotiating a lower purchase price, or you could ask for a closing credit. A closing credit is a way to decrease your upfront, out-of-pocket expenses. That credit reduces your costs, meaning you’ll have more cash on hand to make those repairs yourself. 

A closing credit is a way to decrease your upfront, out-of-pocket expenses.

Think “big picture.” 

Picture this. You’ve toured the home, you’ve agreed on a purchase price, and you’re putting together plans for your future remodel—but the home inspection report found signs of water damage under the sink. And on top of that, the rotted wood extends well beyond the cabinet under the sink. If you could negotiate those repairs now, why wouldn’t you?

When you’re working through home inspection negotiations, think about the future of your new home and remember that a seller credit toward those repairs could offset not only your closing costs, but your eventual renovation costs as well.

Don’t show your hand.

If you’ve got a home inspection coming up, find out if the seller’s agent will be walking the property with you, your agent, and the home inspector. If so, you might want to hide your true excitement about the house. Showing satisfaction with the current state of the home in front of the seller’s agent could hurt your chances of negotiating home inspection repairs later on.

On the other side of things, if the seller’s agent senses disapproval from you during the inspection, they might mention that to the sellers—helping build your case to get any repairs completed to make sure the sale goes through.

Be ready for anything. 

There’s a saying when it comes to buying a home: “It’s not over ‘till it’s over.” That means, until you sign the closing documents and have the keys in hand, anything could happen. The initial contract is just that—initial. With all the people involved, the unknown variables, and the state of the market, there’s a non-zero chance that your dream home could disappear entirely.

Consider this: If your home inspection results are favorable, there’s nothing to negotiate, so don’t try to fight for a lower price or closing credits. If the home inspection results turn up something negative, you may be better off negotiating credits or repairs instead of a lower purchase price—especially if the appraisal came back with a fair value.

Pre-purchase negotiations are tough, and home inspection negotiations can be even tougher. Keep these tips in mind or ask your team—lender and real estate professional—for more advice to make sure you’re prepared for the purchase process.

Although home inspections have become less popular over the last few years, they’re still commonplace in the real estate industry.

The post How to Negotiate Post-Home Inspection Repairs Like a Pro appeared first on Cardinal Financial.

If you’re in the market for a new policy, we’ve got a few tips to help you find the right provider.

To start, let’s talk about what “homeowners insurance” really is. There are a lot of ways to cover your home purchase, including homeowners insurance, mortgage insurance, and a home warranty. They’re all different things. Mortgage insurance protects the lender in case you default on your loan, and a home warranty is a separate piece of coverage that protects your home’s internal systems (HVAC, plumbing, appliances, etc.).

Homeowners insurance, however, is a policy that pays for damage to or the destruction of your actual property, the things inside your home, and the people around it. Generally speaking, lenders will require proof that you have homeowners insurance before you reach the closing table. 

Homeowners insurance is a policy that pays for damage to or the destruction of your actual property, the things inside your home, and the people around it.

That said, homeowners insurance policies aren’t magic “cover-all” options. While they do cover many things, there are several things they won’t cover. We’re here to help you figure out how to choose the right homeowners insurance policy, and we’ll even throw in a few tips on how to save some cash along the way.

“What should my policy cover?”

At the very least, your homeowners insurance policy should cover the “full or fair value” of the home, or the purchase price. Some providers choose one amount, others opt for the latter. Either way, that’s what we call your “dwelling coverage,” or the part of your policy that covers the repairs to or reconstruction of a home that’s been physically damaged by a covered event. Note: “hazard” and “peril” are two other terms you’ll see through your search, but they both mean similar things.

Homeowners insurance policies cover damage or destruction to a home’s interior and exterior, but they also cover theft, personal liability (in case someone gets hurt on your property or worse), and personal property. We recommend getting dwelling coverage that covers the cost to rebuild your home, including labor and materials at their current rates—not just the purchase price or previous assessed value.

Just so you know, there are some things a homeowners insurance policy will not cover. Natural disasters, or “acts of God,” typically aren’t covered by your standard policy. Lightning strikes your home, for example, and zaps your dated breaker panel without additional coverage, and you may have to pay for that fix out of pocket. In some cases, for people living in areas prone to floods, earthquakes, and tornadoes, policies may be expanded at an additional cost.

“How is my rate determined?”

There are many things that go into your rate calculation, much of which is done behind the scenes. Usually, policy rates are determined by your “assessed risk,” which considers your personal claim history, your credit record, the home’s previous claims (if there are any), the home itself (construction, materials, security, etc.), and the surrounding neighborhood (including crime rates). 

“How can I lower my rate?”

Some of the factors that go into your rate calculation are admittedly out of your control. For example, you found your dream home, but it’s in a flood zone. In that case, there’s not much you can do about that other than pay for flood coverage. 

However, there are several other ways you can lower your insurance premium.

Shop around

At the very least, as with anything, you should look at three different policy quotes from three different providers. Some sources say you should gather as many as five quotes, but if you’re seeing similar numbers for equal coverage across the board, go with your gut. Remember: don’t just choose the least-expensive option. Consider other things like company reviews, technology capabilities (can you file a claim from your phone?), and whether or not you’re already a customer with that provider.

Pro-tip: Depending on how many quotes you get, try to call one or two local providers. Sometimes smaller providers can provide better pricing.

Bundle up

Speaking of already being a customer…did you know that many providers offer discounts for bundling your coverage? If you have auto insurance with one company, you may be eligible for a multi-policy discount if you get homeowners insurance with them as well.

Security systems

Investing in a home security system can also help lower your premium, because it tells providers that your home has an added layer of protection beyond locked doors and windows. Security goes beyond cameras, too—upgrading your smoke detectors could bring benefits as well.

Home improvements

Some companies may offer additional discounts for upgrades to your home, like metal construction instead of wood (due to flammability), modern or eco-friendly HVAC and electrical upgrades, and an impact-resistant roof to help protect against Mother Nature.

Increased deductible

While less popular, another way to lower your premium is to increase your deductible. Unfortunately, that means you’d pay more out of pocket if and when you file a claim. It removes risk on the provider’s part, forcing you to carry the expense instead. Note: some lenders may have a maximum to the deductible they allow, such as 5% of the insurance coverage. 

How do I choose a provider?

That’s the easy part: research! You’ve already started the journey by reading this blog, so take everything you’ve learned here with you when you start calling around to different providers. When you’re ready to apply for a mortgage, we’ll be waiting for you.

Homeowners insurance isn’t just a “nice-to-have.” In fact, for most lenders, it’s a required investment.

The post How to Choose Homeowners Insurance (And Lower Your Rate) appeared first on Cardinal Financial.

8 Summer Home Decor Ideas

• Nature-inspired lighting
• Coastal color palettes
• Vibrant patterns
• Colorful tableware
• Lush plants
• Open spaces
• Light-weight pillows and throws
• Bold front doors

1. Nature-inspired lighting

Natural light is always in. But when you can’t always depend on nature to come through, imitation is the sincerest form of flattery. String and novelty lights may typically be associated with winter holidays, but neutral, warm-toned versions can work just as well for summer to replicate the light you’d get from fireflies, beach campfires, and sunset picnics. And if you want to reuse those lights when December rolls around, we won’t tell.

2. Coastal color palettes

Nothing says summer like a trip to the beach. When you can’t go to the ocean, bring the ocean indoors with color palettes inspired by the sea. Corals, pale blues, and neutrals are a great way to achieve that coastal cottage feeling. If you’re looking for a more modern take, try teals, bright pinks, and sunny yellows.

3. Vibrant patterns

The warmest season is all about bold choices. When it comes to summer home decor, that includes patterns. Throw pillows, rugs, and accent walls can be a simple way to incorporate this decor trend. When selecting your patterns, think tropical, nature-inspired motifs in lush greens, warm pinks, and saturated blues. For a more coastal theme, you can’t go wrong with nautical stripes.

4. Colorful tableware

Whether you’re actually dining outdoors or just trying to recreate that alfresco feeling, summer is a great time to get more playful with your dinner and drinkware. Melamine plates and acrylic glasses are a must for outdoor dining, but they also make for an easy clean-up anywhere. For glasses, lighter shades of pink and green can brighten up the table without hiding the nice hues of those summer cocktails.

5. Lush plants

Warm weather means prime plant season. From trailing greens to summer blooms, plants are a versatile way to update decor year-round. Plants aren’t just nice to look at either. Some houseplants literally help regulate the temperature indoors. And if you’re looking for a summer home decor idea that’s less of a commitment than houseplants, popular summer flowers include hydrangeas, delphiniums, and knock-out roses.

Pro Tip: Houseplants tend to attract bugs during the warmer months. A layer of sand on top of your houseplant’s soil can reduce the accessible moisture for bugs, discouraging them from burrowing and multiplying.

6. Open spaces

Sometimes, it’s about what you don’t have. The goal of summer decorating is to achieve a bright, breezy retreat from the heat. The simplest way to do this in your interiors is to declutter. Retire some of those blankets and throw pillows until fall, experiment with more spaced-out furniture arrangements, and keep things light (literally, open the blinds).

7. Light-weight pillows and throws

Speaking of throw blankets and pillows, don’t ditch them entirely for the warmer weather. Instead, switch to cooler materials like linen or silk in summery shades and patterns. If you’re looking for more durable outdoor materials, burlap and polypropylene are popular choices.

Pro Tip: Rather than buying a new set of pillows for each season, buy a set of inserts. This way, each season you can simply swap out different pillow covers.

8. Bold front doors

This one might not be for everyone, but a bold paint color on your front door makes a big difference in the seasonal feel of your home. Before you go all in on this trend, make sure your neighborhood HOA doesn’t have any rules or restrictions about what colors are allowed. Popular summer color choices include navy blue, yellow, and greens with blue undertones.

Bonus summer home decor ideas

When you’re decorating for summer, don’t forget about your outdoor space. Fresh throw pillows, wicker furniture, and elevated outdoor dining setups are a great way to embrace the changing seasons without having to refresh your whole home. For homeowners with pools, comfortable poolside seating is always a smart idea. And if your outdoor space is lacking in shade, patio umbrellas are a must for comfortable outdoor lounging. Don’t forget that summer is ultimately a time to slow down and relax—whatever you decide to do with your space shouldn’t be a source of stress. Have fun with it!

Natural light, open spaces, and bright colors are all great ways to usher the summer sun into your home.

The post 8 Simple Summer Home Decor Ideas to Refresh Your Space appeared first on Cardinal Financial.

What does buying a house “as-is” mean?

The answer to this one is fairly simple: Buying a house “as-is” means you’re buying a home that’s sold in its current condition—warts and all. 

On the upside, these homes are often priced accordingly, because “as-is” homes are rarely in perfect condition. Sellers realize that there’s some work that needs to be done, and they’re willing to settle for less than they would if the home was turnkey. 

The downside, however, is that because “as-is” homes are sold as-is, sellers are stating upfront that they’re not going to make any repairs or touch-ups prior to exchanging the keys. What you see is very much what you get. However, “as-is” isn’t always synonymous with “bad condition.” In fact, while a home’s condition may be one factor that leads to an “as-is” sale, sometimes sellers simply want to sell the property quickly. 

Four considerations to make before buying

We won’t call this official mortgage advice, but consider the following four things before putting an offer on an “as-is” house:

Don’t skip the home inspection

These days, buyers are sometimes hesitant to ask for home inspections. After all, a seller’s market led to a surge in cash offers, bidding wars, and waiving contingencies. However, because the market has cooled off a bit and home prices have started to fall (slightly), there’s no need to skip the inspection—especially if you’re buying a property “as-is.”

Said simply, a home is a huge investment, and a thorough inspection can protect that investment or keep you from getting involved in something you’re not financially ready to maintain. An inspection is less about trapping the seller or uncovering “gotchas,” and more about making sure the house is being sold as described, “as-is” or not.

Explore home warranty options

We’ve got in-depth coverage on home warranties in this blog, but here’s the gist: A home warranty is not required, but certainly recommended if you’re buying a home that’s in questionable condition. You can either purchase a plan yourself or ask the seller to provide one, but it’ll usually cover servicing and maintenance for the home’s appliances, plumbing, HVAC systems, roofing, and other parts of the dwelling.

Make sure it meets minimum requirements

Fun fact: Mortgages aren’t just handed out for any property. Many home loans—including most government-backed mortgages—have “standards for livability” that must be met before finalizing the sale, regardless of whether or not the property is being sold “as-is.”

For starters, a home is almost always required to be structurally sound. If it’s got walls, windows, a ceiling, and a roof, you should be in good shape. Some loans may require access to safe drinking water, and USDA loans specifically may require up-to-date electrical systems and functioning heating and air conditioning.

If certain requirements aren’t met, appraisers may decide that repairs must be made before closing, which can delay or derail the process completely. For this reason, cash offers—which require no mortgage—are oftentimes more palatable for “as-is” sellers.

Crunch the numbers

Consider this: When it comes to “as-is” homes, you’re not just buying the house. You’re buying whatever repairs and renovations need to be made to make the house a home. “As-is” properties may require new doors, windows, lights, flooring, and/or pest control (among other things). These seemingly little projects can add up to tens of thousands of dollars quickly.

Sure, you may save on the purchase price, but you’re going to want to make sure you have a mortgage that includes the cost of repairs or have enough cash on hand to get the ball rolling on repairs on day one.

Weighing the pros and cons

Buying a house “as-is” comes with a variety of its own pros and cons. 

Pros

Like we said earlier, “as-is” homes are typically priced lower. And because there’s not a lot of “work” to do on the homes before closing, the timeline from offer to closing may be expedited. Lastly, if you’re interested and have the funds available to do so, “as-is” homes offer a nice foundation for flipping.

Cons

When you include the down payment, closing costs, and repairs, you may see higher “all-in” costs. Additionally, not every state requires a “Seller’s Disclosure”, which would identify the home’s issues and alert you to them ahead of time. Finally, as we mentioned earlier, a property’s poor condition may prevent you from qualifying for certain loans. 

Now that you know what “as-is” means, are you more or less interested in buying a house in that category? Whenever you’re ready, we’ve got home loan pros who can help.

When it comes to “as-is” homes, you’re not just buying the house. You’re buying whatever repairs and renovations need to be made to make the house a home.

The post Buying a House “As-Is”: What It Means & What You Need to Know 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.

Your out of state move checklist

• Assess your finances and set a budget
• Compare costs of living to narrow down locations
• Explore potential homes virtually
• Find a great local real estate agent
• Visit the new area and view potential homes
• Get pre-approved for financing from the lender of your choice
• Make an offer
• Start planning your move

1. Assess your finances and set a budget

When you’re moving out of state, your costs won’t just include buying a new house. You’ll also need to budget for things like movers, storage, gas or plane tickets, and accommodations for the period between moving out of your current home and into your new one. As for your new house, don’t forget to include closing costs and appraisal fees in your mortgage budget.

Pro Tip: We may not be able to help you calculate your unique moving expenses, but we can help you calculate how much home you can afford. Take our affordability calculator for a spin to see what’s possible.

2. Compare costs of living

It’s no secret that the cost of living has been on the rise lately. That being said, cost of living does vary by state, city, and even neighborhood. So, once you have your budget, it’s time to use that to narrow down your target location. Cost isn’t everything, of course. When deciding where to house shop, don’t forget to prioritize what matters most to you. That could be school districts, proximity to work, walkability, and anything else you need to be able to put down roots.

3. Explore potential homes virtually

So, you’ve decided on an area. Now, it’s time to explore homes. Even though this step is a challenge with out of state moves, virtual tours have come a long way since Covid. In addition to listing photos, many homes may also provide video tours, FaceTime tours, and more ways to see the space without booking a flight.

4. Find a great local real estate agent

This one is important. Since you’ll be conducting most of your house search from across state lines, having a real estate agent on your team who knows the local area is key to finding great homes in areas you’ll love. A good agent should have:

• In-depth knowledge of the local area
• A track record of closing quickly, for less than the asking price
• Clear communication expectations
• Strong negotiation skills

5. Visit the new area and view potential homes

Whether it’s time, budget, or any number of other obstacles, this step might not be possible for everyone buying a home out of state. But, if you can swing it, it’s always best to see a home in person before you make an offer. To make the most out of your trip, wait until you have specific houses in mind to tour with your real estate agent (and make sure those showings are scheduled ahead of time). You should also use this opportunity to explore the local area and get a feel for the specific neighborhoods you’re considering living in.

6. Get pre-approved for financing from the lender of your choice

So, you’ve got a home in mind. Now it’s time to choose a mortgage lender. If you want to use a lender you’ve already worked with before, great! Just make sure they’re licensed to operate in the state you’re moving to. Especially in a seller’s market, pre-approval is a must-have if you want to bid competitively. Most pre-approval letters are good for up to 60 days, so don’t take this step until you’ve chosen a home and are ready to make an offer.

Especially in a seller’s market, pre-approval is a must-have if you want to bid competitively.

7. Make an offer

Ready to take the plunge? Once you’re pre-approved, your real estate agent can help you make an offer on your home. Just a heads up: You may find yourself in a bidding war with other buyers. To ease the stress and reduce the chances of your offer getting rejected, try these strategies:

• Get pre-approved
• Lower contingencies
• Include an escalation clause
• Stay flexible
• Don’t give up if your first offer isn’t accepted

8. Start planning your move

We could fill a whole separate blog with moving tips, but here’s the general breakdown.

8 weeks before you move

• Take inventory of your stuff. What are you keeping? What are you donating? What needs to be thrown out?
• Arrange moving transportation. For long-distance moves, you’ll likely also need to consider storage for your belongings if they arrive before you do.
• Transfer school and vet records if needed.

6 weeks before you move

• Buy packing supplies (more than you think you’ll need).
• Remember that casserole that’s been sitting in your freezer? Time to use it or lose it.
• Measure your new space to make sure your furniture will fit. No sense lugging a dresser across state lines only to find that it won’t fit through your new doors.

4 weeks before you move

• Packing time! Don’t forget to set aside items that you’ll need to keep with you throughout the move, as anything you pack may be in storage until you can settle into your new home.
• Disassemble furniture you’re not using. Your movers will likely do this anyway, but probably with less care.
• Label your boxes. Your future self will thank you when it’s time to unpack.
• Change your address and update your billing information once USPS has processed your request.

2 weeks before you move

• Submit your workplace PTO requests for moving week if needed.
• Prep your vehicle for the trip.
• Confirm moving day details with your mover.

Week of your move

• Refill prescriptions if you have them.
• If you have pets, update the address associated with their microchips.
• Get cash to tip your movers.

Bonus tips on how to buy a house out of state

Our final advice for how to buy a house out of state? It’s never too early to start planning. An out of state move may not be in your immediate future. But, if it’s something you’re interested in doing down the line, make sure you’re ready when the time comes. Start saving for your move, plan trips to cities you may want to live in, and don’t forget to have fun.

With a little extra research and the right real estate agent, it’s easier to buy a house out of state than you might think.

The post How to Buy a House Out of State in 8 Steps appeared first on Cardinal Financial.

So, if you’re looking for the best ways to build good credit, you’ve come to the right blog. Here are our top seven tips. Let’s get into it, shall we?

1. Knowledge is power.

Maybe you signed up for a store’s charge card to get that extra 20% off one day. Maybe you took out a car loan to celebrate your first adult job. And maybe, just maybe, you have a few late payments hiding amongst the skeletons in your proverbial credit closet. We get it—looking at your own credit score and the history attached to it can be frightening for some people. But if you don’t know what you’ve got, you won’t know what to improve. Our advice? Get familiar—not only with your own credit history, but with how credit works in general. 

First, you’ll want to pull a copy of your credit report from a reputable, reliable source. Any one of the three major reporting agencies (Equifax, Experian, or TransUnion) ought to do. Everyone in the United States can get six free credit reports from Equifax per year until 2026. Per the Federal Trade Commission’s Consumer Advice section, that’s on top of the report you’re able to get for free each year from the three aforementioned agencies. All you have to do is visit AnnualCreditReport.com to get started.

After you’ve pulled and reviewed your credit report, you’ll want to keep this in mind: Each reporting agency calculates your score differently, and not all creditors report to all three bureaus. While they may vary slightly, they all follow the FICO scoring method, which uses predictive data analytics to generate an accurate credit score. That said, they all consider things like account age, payment history, balances, and the number of accounts when generating your score. 

2. Error. Error. Error.

While the nation’s leading credit reporting agencies use digital tools and analytics to read your data and generate a score, those tools are often operated or read by people. And let’s be honest, people make mistakes sometimes. Lenders and creditors are no different. 

Should you obtain a copy of your credit report and discover an error or two—maybe an amount owed is higher than you thought, or maybe your address is wrong—you’re more than welcome to dispute those errors. In fact, you’re well within your legal right to do so, since the Fair Credit Reporting Act promotes the accuracy, fairness, and privacy of consumer information held by credit bureaus. It gives you the right to dispute errors or inaccuracies, have them investigated, and (hopefully) get them corrected. 

3. A low balance is a good balance, but no balance is better.

Hands down, one of the best ways to build good credit is to keep your balances low, or flat-out non-existent. Hey, we understand—sometimes you have to use a credit card to get by until the next paycheck, and sometimes you’ve gotta take out another student loan to cover a semester’s tuition. Those balances play into your “debt-to-income” ratio, or DTI. 

As a mortgage lender, we and other companies use your DTI as one way to gauge your readiness for, and ability to pay off, a home loan. Different home loans and programs have different DTI requirements, but generally speaking, a higher DTI signals greater risk for the lender. We want to know you can pay back what you borrowed, and having to pay off a bunch of other accounts may get in the way of that ability to repay. 

How can you lower your DTI? Lower your balances. There are a number of ways to approach this, but one of the most popular methods is sometimes referred to as “the snowball method,” where you pay off the smallest balances first to free up funds for later payments on larger balances. Even getting a small balance to zero is a win, so don’t hesitate to get started as soon as you’re able.

Want to learn more about DTI? Check out this blog to get all the details.

4. The best time is on-time.

Of all the things that can hurt your credit score, late payments are near the top of the list in terms of impact. That’s because payment history is a major player in determining your credit score, and even one missed payment can cause your previously stellar credit score to go sideways. The later your payment, the greater the impact.

• 30 days late is usually seen as a minor mistake.
• 60 days late is a red flag. 
• Once you hit 90 days late or more, creditors start exploring their options—one of which is sending your account and balance to a collection agency.

Of all the things that can hurt your credit score, late payments are near the top of the list in terms of impact.

Getting sent to collections won’t just damage your credit, it’ll drive you up a wall and have you ready to do whatever it takes to make them stop calling you. So, whatever you do, try not to fall behind. 

An easy way to help keep you on track? Auto-pay. Obviously you’ll want to make sure you’ve got cash in your account to cover every payment, but if you’re someone who frequently forgets to make payments (even minimums), this is a no-brainer. 

5. Budget best practices.

For some people, remembering to make payments isn’t the problem. It’s having enough money in the first place.

While living by a budget may not have a direct impact on your credit report, per se, it will lead to better financial habits. That trickle-down effect should then find its way to your credit report, because you’ll have budgeted appropriately to pay down (or pay off) your balances on time, every time. 

Budgeting is a discipline, but it’ll have a long-lasting positive impact on your life if you stick with it. Some folks need a little help with accountability, so ask a friend to tell you “no” next time you want to put a new pair of shoes on that credit card. And while there are apps abound to help keep track of your money and where it’s going, sometimes you can get away with a simple spreadsheet that documents when your money is coming in and what it’s going to. We’re talking simple addition and subtraction, folks. Budgeting is a discipline, but it’ll have a long-lasting positive impact on your life if you stick with it.  

Budgeting is a discipline, but it’ll have a long-lasting positive impact on your life if you stick with it.  

6. Live within your means. 

Just because credit can help you buy things you wouldn’t typically be able to afford, that doesn’t mean you should depend on it. A smarter way to get a handle on your finances is to live frugally and well within your means. 

If you want to use a credit card for daily expenses and bills, fine, no one will stop you. We recommend treating it like a debit card instead of a credit card, though. If you rack up expenses, pay them off in full each month with your income. That way, you reap the rewards (literally, in some cases—hello, cash back) but maintain good standing with a low or zero-dollar balance. 

Alternatively, consider going on an all-cash diet. Once you’ve got a habit of responsible spending, then you can get back into using your credit card. 

7. Age is more than just a number.

Everyone loves a new pair of shoes, but when it comes to credit reports, the older your account, the better. Earlier, we mentioned credit bureaus keeping track of how long your accounts have been active. That’s where this piece comes into play. 

An older account, especially one that shows consistent on-time payments and a history of keeping a low balance, will do wonders for your credit score. On the other end, new accounts can temporarily lower your score and will impact the average age of your credit profile. One account you’ve held in good standing for 10 years is better than several new accounts you’ve opened up back to back over the last three years. Each new account lowers the average age, which is a major factor in your credit score. 

An older account, especially one that shows consistent on-time payments and a history of keeping a low balance, will do wonders for your credit score.

That said, opening new accounts is still key to building good credit. A blend of accounts shows lenders and creditors that you’re able to balance different types and amounts of debt. The secret is to keep those older accounts open, even if you’re not using them all that often anymore. 

The best way to build good credit? Be responsible.

If you’ve ever wondered how to build good credit, now you’ve got the goods. Take this information and make your credit work for you, not the other way around. And if you know someone else who wants to know how to build good credit, be a pal and share this blog.

The post The Best Ways to Build Good Credit appeared first on Cardinal Financial.