Loan Options for those Looking to Downsize

(5 min read)

Over the past decade, Baby Boomers (those born from 1944 to 1964) have been the generation to watch both as consumers and home buyers.  Although a shift is taking place and many industries (including real estate) are beginning to focus on the Millennial generation – their housing needs, preferences and purchasing behavior — the Boomers still represent a significant portion of overall home sellers and buyers in 2019. Why? With their children out of the house, many Boomers are looking to downsize.

While they may be looking to transition into smaller homes, they still expect the same high-end amenities, finishes and offerings that come standard in a larger multifamily residence, and complements their modern, active lifestyle.

In this article, we’re sharing a couple of tips for those Baby Boomers looking to downsize, as well as mortgage options that complement their next forever home.

Reverse Mortgages

Reverse Mortgages hit the scene in 1961 and really gained popularity in 2018. It is a type of loan available to homeowners that are 62 years of age or older and have a high amount of equity built up in their current home. Borrowers are not required to make monthly principal and interest payments to their bank or lender, as they would be required to do with a traditional purchase or refinance mortgage. Instead, their bank or lender pays them in a lump sum(s) or via a line of credit based on their home’s equity.

Why is this a good option for the Modern Boomer? Picture a couple that would love to find a smaller home with less maintenance, etc.  They no longer need to live in the best school district and want a lifestyle that allows them the freedom to travel and be more active. The amount of equity they have in their current home, although high, may not allow them to buy a small house or townhome outright because of their desired area’s higher home values.  A reverse mortgage would allow them the opportunity to purchase the home they want, and still have money left over to travel because they are receiving their equity as additional income vs. rolling it into a traditional purchase.

 

Condos

Many of today’s higher-end condo communities offer a variety of upscale amenities to complement their convenient location and accessibility – making it  a very desirable option for the modern Boomer. However, it has been difficult in the past to acquire a loan on a condo because of factors like community occupancy percentage (how many units are owner occupied versus investment properties) and HOA status – including financial reserves and arrearages. Good news, tools like Freddie Macs Condo Project Advisor now lets the buyer request unit-level exceptions for existing condominium projects early in the loan origination process so condo sales and financing are more streamlined.

There are many finance options available to homebuyers looking to downsize.  If you have questions regarding any of the loan programs mentioned above, be sure to contact a Cardinal Financial expert today at 480-759-1500 and we’ll be happy to assist in finding your client a solution that works best for their lifestyle.

Tips for Choosing the Right Realtor

(2 min read)

Tips For Choosing the Right Realtor

A record number of Americans are gearing up to buy their first homes.  This is a big decision that can bring a lot of questions including the big one. How do I choose the right realtor? We can help with that! Read below for simple tips that will help you find the best real estate agent.  Here’s a hint: the tools you need are actually right in front of you.

 

Ask Around

Just like recommending your favorite local coffee shop, word of mouth recommendations are still the best way to go to begin curating your list. Ask friends and family for realtor references especially if they are recent buyers. It’s important to note that just because a realtor might have been a good fit for someone you know, they still may not be the right one for you.

 

Find Your Neighborhood

Decide on the areas that you are interested in living in and narrow down your potential realtor list based on that.  You can research this online or drive those neighborhoods and take note of the realtors selling homes there. Working with an agent who has experience in successful sales in the area you want to live will put you several steps ahead.

 

Google!

It’s time to find out more about your potential prospects. Do a few Google searches to get to know their online persona.  As a first time home buyer, pick a realtor who is experienced and knowledgeable, but also current and fresh. Does it seem like they know the area you are interested in?  If they have a website, is it modern and up-to-date? Are they active on social media and post regularly? Do they offer relevant content that is helpful and coincides with your vision? A realtor who takes the time to continue learning about the growing market trends is someone you want on your side.

 

Be a Boss

Make a list of real estate questions that are important to you regarding your house hunt.  Ask them to explain the home buying process and add anything that you expect from your realtor (i.e. preferred method of communication, how often you would like updates).  Being honest about your expectations from the beginning will pave the way for a smooth buying experience. Meet your potential realtor for coffee or just give them a quick call. Do you feel that they are genuine in the advice and information they are offering you? Are they approachable and outgoing? Someone who is outgoing is most likely confident and confidence is definitely a characteristic you want when choosing a realtor. At the end of the day, go with your gut. And remember, they work for you.

Buying a first home is a significant milestone. Take your time when selecting who will help you make this major financial and emotional decision. Just don’t forget to have fun and enjoy this time, too! You’re only a first-time home buyer once!

If you need help finding the right realtor for you, call us.  Cardinal Financial AZ has worked closely with hundreds of realtors and will be able to recommend the right fit for you. Call 480-759-1500 or email matt.askland@cardinalfinancial.com to talk about your options!

What’s Keeping You From Buying?

7 Tips for Negotiating Without a Real Estate Agent - myarizonaloan.com

Are you looking to buy a home in 2019 but worried about finding a lender that can work with your situation? Maybe you are self-employed and think you won’t fit into a cookie cutter loan program. Mortgage loans are not one size fits all and Cardinal Financial understands that better than anyone. We have smart solutions for just about any circumstance and are here to help!

Income & The D Word (DEBT)
Many prospective buyers believe that your credit score is a deal breaker when purchasing a home. That is not the case! Your monthly debt to income ratio (aka DTI) is also a significant factor. You get this number by dividing your total monthly debt by your total monthly income before deductions. The DTI golden rule is to keep your debt at less than 50% of your income. And just like a golf score, the lower the better!

The Dreaded FICO Score
A lot of credit cards, car loans, etc can make getting a mortgage more difficult but definitely not impossible! The goal is to keep your balance at less than 50% of your credit limit on each card. Helpful Hint: Don’t open or close any trade lines prior to getting pre-qualified and throughout the entire loan process. A Cardinal Financial Loan Adviser will let you know when it is ok to make any changes to your credit.

Credit History Haunting You
Don’t dwell on the past! Lenders mainly concentrate on your last two years of credit and rental history. So you can breathe easy; no one is digging for a skeleton in your closet!

Down Payment Stress
Good news! There are several sources of down payment assistance. Did you know that you can borrow directly from your 401K? And when you borrow from yourself, it will not affect your credit score. With an FHA loan, all you need as a down payment is 3% from your 401K.

Qualifying for a loan is easier than you think! And when you work with Cardinal Financial, the possibilities are endless. With our experience, knowledge and creativity we have all of the tools to help you find the right loan. So start that 2019 Pinterest Future Home board and pin away!

To learn more or if you are looking for a great lender contact us! We are always available at 480-759-1500.

Looking to Buy A Home? | 3 Tips For Improving Your Credit Score

Congratulations! You have decided to purchase a home. It is a very exciting time; however, it can also be very stressful. You begin questioning if your credit score is in good shape? Will this slowdown or stop the process of buying a home altogether? How can I improve my credit score, fast?

First of all, do not panic! Many consumers are worried about their credit score. Trying to improve one’s credit score is a common concern for a lot of buyers. Check out these tips on how to approach any issues and improve your credit score so when mortgage lenders look at your financials you are in a much better position than you were prior.

3 Tips on How to Improve Your Credit Score

  1. Pay Off or Lower Debt

Paying off debt is one of the quickest ways to improve credit scores. Credit utilization makes up 30% of your credit score. Therefore, try to pay off your balances or keep them predominantly low. With the holidays around the corner, do not foolishly dig yourself in more debt because you are shopping for friends and loved ones. Keep it simple and keep a budget as you have big plans to purchase a home.

  1. Stay Current on All Accounts

Do you have any accounts that have late payments? Catching up on all delinquent accounts and outstanding fees can improve a credit score pretty quickly. Once you take care of those unpaid dues, it is vital that you pay your bills on time. By staying on top of payments, you will continue to increase your credit score.

  1. Plan Accordingly

When you are preparing to buy a home, there are a few things you should and should not do. You should be mindful of any additional large purchases you plan on making. For instance, this is probably not the best time to buy a car. Every event you apply for credit can cause a decrease in your credit score which is not what you want right now.

It is also not an ideal time to open or close any accounts. You may want to shut down an account once you have paid off the balance, but you should ensure that this will not affect your credit score first. Most of the time closing an account will not improve your credit score, and by leaving the account open, you can continue to increase your score by making timely payments.

Want more? We’ve put together a downloadable list of 12 Things Not to Do When Getting Approved For a Home Loan.

With these credit improving tips you should be well on your way to becoming a new homeowner! If you are still seeking further guidance, call us at 480-759-1500 or email matt.askland@cardinalfinancial.com and we’ll be happy to assist you.

Happy house hunting!

3 Housing Options To Consider For Continued Independence As You Age

Independent living is often cited as being good for one’s well-being, so it’s no surprise that aging in place has become so popular. Aging in place is a term used to describe a person living in the residence of their choice, for as long as they are able, as they age. This includes being able to have any services (or other support) they might need over time as their needs change.

Thankfully, many options in today’s housing market make aging in place possible.

Preparing for physical safety and financial security are the most immediate concerns that come to mind as we plan for aging in place. However, convenience and overall well-being should also be considered before deciding where to settle in.

Here are three housing options to weigh as you or your loved ones plan for continued independence.

1. Renovate Your Current Home
Adding front entry ramps, bath bars, sit-in tubs and other safety features may make it physically possible to stay where you are. However, renovation costs can add up quickly, especially if they’re needed all at once.

Home maintenance should also be factored in. Who will manage the upkeep if the property has multiple floors or a large yard?

2. Right-Size to a Manageable Floor Plan
Some may find it easier to purchase a home with barrier-free, universal design rather than deal with the stress of home renovations. Moving closer to family and friends can also help to prevent social isolation or depression.

3. Buy a New Home With Family Members
Floor plans for multigenerational homes are often designed with individual privacy in mind while allowing family to be nearby. Sharing home maintenance costs also minimizes living expenses. And this is an excellent way to help family members enter into homeownership.

Aging in place requires thoughtful preparation. Get in touch with one of our trusted loan advisers today to discuss the option that best fits your long term housing needs.

The 10 Most Common Mistakes People Make When Buying Their First Home

Getting ready to purchase your first home?

Here are 10 things to avoid:

  • Not Budgeting for a Home Loan: Owning a home may be cheaper than renting in the long run, but it’s a hefty up-front investment if you’re planning to take out a loan. Make sure you know how much you can afford to pay each month.
  • Ignoring Your Credit Score: A solid credit score will help you go from renter to homeowner. Even if you’re great at budgeting and earn a decent income, a poor credit score may hurt your chances of qualifying for a loan.
  • Not Paying Attention to Housing Trends: The housing market fluctuates. Sometimes it favors the buyer, sometimes it favors the seller. Read up on housing supply and demand, as well as interest rates and price history in your desired neighborhood.
  • Shopping Before You’re Qualified: Don’t shop for a home before you’re pre-qualified for a mortgage loan. It will just lead to frustration and heartache. Meet with an accredited lender or mortgage advisor so you have a clear understanding of your price range.
  • Overlooking a Home’s Resale Value: It’s rare to buy a “forever” home these days. Therefore, it’s good to consider ahead of time whether you’ll be able to re-sell the home for a decent price – or maybe even a profit! – in the future.
  • Trusting an Unqualified Realtor: Hiring the right realtor is the most important step in your home search. Make sure that you’re working with someone who is savvy and well-versed not just in real estate, but the neighborhood of your dreams, too.
  • Betting on a Verbal Agreement: Nothing in home-buying is legitimate until you’ve got a signed contract. Don’t hang your hopes on someone’s word and a handshake. Get all details – requirements, agreements, prices and dates – on paper.
  • Disregarding Hidden Costs: Budget for all of the fees – obvious and hidden! – in the homebuying process. What’s a hidden fee? One example is the closing cost, which can include everything from attorney to title search fees.
  • Forgoing a Professional Home Inspection: Don’t rely on the seller or their real estate agent to point out any issues with the home. Hire a professional home inspector to check for damages, pest problems or any issues with the property.
  • Forgetting Other Related Costs: Just like buying a car, owning a home comes with long-term financial responsibility. Prepare yourself for things like association fees, insurance, taxes, utilities, and regular maintenance and upkeep.

Are you you in the process of looking for a first-time home? Let Cardinal Financial (formerly RedStone Mortgage) assist you in finding loan options that meet your individual needs. Call us today at 480-759-1500.

Meet Your Neighborhood Lender: Matt Askland, RedStone Mortgage

 

Today we’re sitting down with our very own Matt Askland to get his professional insight on the current Phoenix real estate market. An expert in the mortgage business since 2000 and the main driver here in our Southwest region, he’s been a vital component to RedStone’s success. Let’s jump right into our chat with Matt.

First, let’s have a bit of fun. Finish this sentence: You know you’re officially a Phoenician when…

…you’ll park at the far end of the lot just for that tiny piece of shade. Also, when you can pronounce cities like Ajo and Gila Bend, and when you don’t need GPS because you speak in directional language – NEC, SEC, NWC and SWC.

So true! Speaking of shade, what are some of your favorite family-friendly ways to beat this summer heat?

I just broke the bank on a backyard for my family to enjoy our own little slice of paradise. I have a pool in my life again! We also love Top Golf, Main Event and the water parks.  If you really want to beat the heat, travel north and enjoy the cool mountain air.

Alright, switching gears to the professional now. What is one piece of advice you’d give to homebuyers about the financing process?

You really should get pre-qualified. Don’t dabble in this market unless you really understand what you can afford. We also advise people on what NOT to do when shopping for a home. For example, don’t go buy a new car, change your job or how it pays you, and definitely don’t take on a new credit card or move large sums of money in or out of your bank account.

And how can Realtors best help clients qualify in today’s market?

Ask them these three questions: 1) How much cash do you have saved for the down payment? Their answer will tell you if they need help. 2) How would you rate your credit? If they don’t say excellent, let us know so we can dive into why. They may not tell you, but they’ll tell us. 3) How long have you been at your job? This will tell you about their stability as a borrower and buyer.

Are there any under-the-radar lending and financing options consumers should be aware of at the moment?

Yes, definitely. Many of our senior clients are finding financial freedom in reverse mortgages. This program allows you to convert a portion of your home equity into cash and use the wealth they’ve built in ways that are truly beneficial to their lives. Also, the HomeReady® program by Fannie Mae is ideal for today’s borrowers who have limited savings. With as little as 3% down, you can qualify for a competitive rate and mortgage.

What kind of questions do you have about qualifying for a home loan in today’s market? Leave them in the comments below and we’ll do our best to answer!

Realtor Q&A: LaLeña Christopherson of The Christopherson Group

LaLeña Christopherson regularly performs in the 99th percentile at West USA Realty, which is no surprise to us because we see how often she goes above and beyond for her clients. Her strongest ability is recognizing exactly what is most important to her clients and doing whatever possible to turn their dreams into reality.

Working with the most discerning clients, LaLeña regularly delivers top-notch service and she’s also one of the market’s smartest Realtors. We’re honored to have her share knowledge with our community!

What would you say is the most important thing for people – both Realtors and new homebuyers – to know about the current Phoenix home market and values?

The Phoenix home market is very aggressive right now. There is a shortage of inventory and sellers are controlling the market. I find that the best value for buyers may be the house that was priced too high at the start and did not sell – then the opportunity is there for the buyer to purchase at a fair value. I find that a homebuyer really has to be pre-qualified and ready to go; they have to be able to compete in this aggressive seller-driven market. As Realtors representing sellers, we are always trying to get the highest price and most solid buyer to ensure a smooth closing. The further along in the qualification and approval process the buyer is, the more attractive the offer to the sellers.

What is one question you’re getting regularly from homebuyer clients right now and how do you address their concerns?

The most common question I get is, “How do I compete with cash?” There is lot of cash in the market right now, especially in the $400,000 and below marangerket. It is tough to compete with for buyers who are putting minimal down. I recently had a situation where my seller took a cash offer from an investor. The next day, after we signed the offer, we received a back-up offer from a 10% down buyer. The 10% down buyer wrote a letter explaining about their family situation and how this home was perfect for them. My seller was so moved, they told me that they would rather sell to that buyer if they could because they were excited to think that a couple wanted to make the house a home. So, my advice is, don’t be discouraged as a buyer. Even if you are competing with cash, explain your situation and let the seller know a bit about you!

How would you explain the current Phoenix market and local home values to wannabe buyers?

HOT HOT HOT and rising! Competition is rising. Summer is upon us, but there are more people relocating here everyday. Our job market is great and our state taxes are low, so Arizona is an appealing place to live. If you are going to jump into the market, be ready. Get your approval done and ready to go, and of course, align yourself with a competent Realtor who knows the market.

Based on your experience, who would you say is buying the majority of new homes in the Phoenix area right now?

I believe we have a storm going on – not just one set of buyers. We have first time buyers, move-up buyers, investors and out-of-state buyers who are definitely driving up the prices. When you come from California and sell your shack for $2.3 million and move to Arizona, where you can buy a 3,000-square-foot home for around $700,000, it seems like a dream. Out-of-state buyers don’t even blink at our prices.

Where do you see the Phoenix market going this year, and how can Realtors and potential homebuyers best prepare for what’s to come?

I believe the market will continue to be strong. Rates are climbing and may go even higher. Buyers will be stepping off the fence and making their move as rates creep up. The best way to prepare if you are a homebuyer is to get fully approved with a trusted lender, know your numbers and when a home comes up that works, jump on it. I recently had a buyer who did not move quick enough. In a low inventory market, you cannot delay. He lost the home to another buyer because he had to “think about it.” By the time we found a similar home 3 months later, the price was $30,000 higher and we had to bid against multiple offers. He had the stress of constantly looking and told me he wished he would have not delayed on the first home.

Are you a Phoenix-area Realtor with an interesting perspective to share? We want to interview you! Tell us about yourself in the comments below and you could be featured in a future Realtor Q&A.

What NOT To Do: 5 Pitfalls to Avoid When Applying for a Mortgage

Here at RedStone Mortgage, we often advise our clients on the things they need to do as part of the homebuying process, but it’s just as important to understand what NOT to do. Here are just a few of the things you need to avoid if you’re in the market for a mortgage.

Skipping the pre-qualification stage. It may sound like a shameless plug for our services, but we promise you, it’s not. One of the biggest mistakes you can make as a homebuyer is beginning the shopping process without understanding just how much house you can afford. Going through pre-qualification will help you set a realistic budget and create an action plan for any negative marks on your credit report.

Racking up debt. We can’t stress this enough – pay off your debt before you begin looking for a mortgage. Carrying too much debt can seriously affect your chances of qualifying for a loan as well as the final details of your loan – like interest rate. Besides paying off your credit cards, you’ll also want to be careful of just how much you’re using them as even a single purchase can significantly alter your credit utilization ratio.

Making any other major purchases. Hold off on buying that car or taking that grand vacation. Auto, student and personal loans all play into credit score, too, because they contribute to your debt load. When you apply for a home loan, lenders will take into account your total debt and compare it to your gross monthly income.

Making any major career moves. Now’s not the time to begin your entrepreneurial journey or become a free agent. Mortgage lenders want to see a steady history of employment – in most cases, they’ll review your income from the past 2 years. Unless your career change comes with a big – and immediate – pay raise, avoid making any major moves until after you’ve secured the loan.

Blowing your savings. The down payment and closing costs are just two of the out-of-pocket expenses you can expect during the homebuying process, but there could be even more. For this reason, most lenders would prefer that you don’t spend all of your savings on the down payment. It’s always good to have extra reserves for the unexpected costs of homeownership.

Are you in the market for a new home? Let RedStone Mortgage assist you in finding loan options that meet your individual needs. Call us at 480-759-1500.

Realtor Q&A: Karl Tunberg, Midland Real Estate Alliance

With more than 20 years of experience in the Arizona real estate market, Karl Tunberg has built a stellar reputation by serving his clients’ interests above all else – handling each transaction with knowledge, experience and integrity.

He’s got an extensive background in commercial real estate, new home sales/construction and residential brokerage, just to name a few areas of expertise. Karl is a Realtor partner of ours because he’s simply one of the best in the game; a true professional with sound instinct and real principle.

What is the most important thing for people – both Realtors and homebuyers – to know about the current Phoenix home market?

First, the Phoenix housing market is dynamic. With more than 25 municipalities and homes spread over 250 square miles, you can find just about anything you’re looking for – from low to high [prices].

While there are many location choices, the amount of available homes has shrunk significantly over the past couple of years as the robust Arizona economy continues to grow. Currently, there are 18,000 to 19,000 single-family detached homes on the market for a city housing more than 6 million people…with 100+ people moving into the area each day.

As an agent or new homebuyer, time is of the essence. The market is brisk; there is a lot of competition for good, available homes and they sell very fast. If you’re trying to find a home or find a client a home, you need to be diligent, aggressive and smart.

Diligent in following up and searching for the right home for you or your client. Aggressive in the offer (full list price or better, limited or no concessions requested of the seller and a short escrow period). Smart in your approach and handling of the negotiations, inspections, selection of the mortgage company/team, and all other aspects of your search and selection.

Purchasing a home, or representing a client for their purchase, is a huge responsibility and usually the largest investment that a person will ever make. Handling the process with intelligence is paramount.

What is the one question you get repeatedly from your first-time homebuyer clients and how do you address their concerns?

The question I always hear is, “How much is this home really going to cost me?” Most new homebuyers are scared about the “unknowns” in the homebuying process – loan fees, title fees, Realtor commissions, inspection fees, etc. The entire process has its own language and most people don’t have any idea what these terms mean.

Providing your clients with, or seeking out the information from, a professional mortgage or real estate person is a key step to doing your due diligence when getting involved in the home buying process. As a first-time or new-to-the-area buyer, you should always hire a professional for both your real estate search and your mortgage.

Having someone who represents your interests makes a huge difference in what you will pay for, the value you get, and the long-term investment potential. As a newer agent, joining a team, getting a mentor and working with great affiliate partners (mortgage, title, inspectors, warranty companies, etc.) will help you bridge the experience/knowledge gap quicker than all the classes you could go to for years. There is no substitute for being humble, hardworking and smart.

Where do you see the Phoenix market going this year, and how can Realtors and potential homebuyers best prepare for what’s to come?

The Phoenix market is very strong right now. Net migration, employment, affordability (in comparison to other U.S. markets) and quality of lifestyle are all drivers for the market. The lack of quality inventory, rising construction costs, lack of skilled labor and over-inflated land prices are all external pressures on the resale and new construction housing market in Phoenix.

To some extent, the market’s strength is also eroding itself by growing too quickly, a bad trap that is no stranger to veterans of the market. The best preparation and advice I can offer is to seek wisdom from the history of the market. That may seem like an obvious statement, but greed and rampant speculation can easily blur your vision.

I’m not recommending to stay out of the market, but just to be cautious, analyze the deal, be conservative in your expectations and keep in mind that this market can change quicker than you can cancel a deal.

Are you a Phoenix-area Realtor with an interesting perspective to share? We want to interview you! Tell us about yourself in the comments below and you could be featured in a future Realtor Q&A.