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Gina McKinley

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Indecision is Not a Decision

by Gina McKinley

Wanting to buy a house takes some definite and strategic planning. The very first thing to do is make sure that you can get a loan. What do I need to get a loan? Typically, it takes about $60,000 gross income per year to qualify for a $300,000 home loan, and a good credit score. You need to ask “How can I improve my credit score?” Sadly, some lenders have gotten into the mode of “producing” and have forgotten the joy of helping those who need it.

There could be some legitimate reasons for not buying a home but indecision is not one of them. Indecision is rooted in not having enough information to move forward to own a home or continue renting.18443593-250.jpg

If you keep renting, at the end of the year, you have had a place to live and a pile of receipts that helped the landlord pay for his investment. Deciding to buy a home will give you a place to live that is yours and all the things that come with that.

When you consider principal reduction, appreciation and tax savings, your monthly cost of housing could be much less than the rent you’re paying. The principal reduction included in each payment is like a forced savings account that increases as your mortgage balance decreases. Your equity in the property will also grow due to appreciation as the home goes up in value. The equity is part of your net worth and an investment in your family’s future.

The income tax savings can be an additional financial consideration if the combined interest and property taxes are greater than the allowable standard deduction.

Trends are showing that both tenants and homeowners are staying in their homes longer. It’s been said that whether you rent or own, you’re paying for the home. Do you really want to buy the home for your landlord? Check out your numbers on a Rent vs. Own and then, call us to help make it happen.

As you consider the possibilities of home ownership there are a lot of questions…some I can answer and others a loan officer is needed. However, home ownership is still the best investment for long term growth. And even though you own a home, you still need to keep your credit sparkling clean for the next opportunity that will show itself. Do not let those credit cards get behind, and make those minimum payments. Therefore when those questions arise make sure to reach out and contact us at 480-355-8645 OR Info@LocateArizonaHomes.com


 

Risk Rate Relationship

by Gina McKinley

Many years ago when I was just starting in real estate, I had clients who would shop interest rates and pick a lender based upon the rate quoted. More often than not, and in spite of my advice, those rates would be for a 10 day close. That meant the loan had to close in 10 days or less to get the rate quoted. Normally, that did not work out, but after all the trials and tribulations of getting that initial approval, the borrower would stay with that lender, not always a pretty result...

Regardless of what a lender quotes on mortgage rates, the actual rate a borrower pays is based on a number of variables. Lenders determine whether to loan money and at what rate based on the risk involved with the transaction.Sorry not available.png

Factors that increase the risk that the loan will be repaid will proportionately increase the interest rate charged to the borrower. If the risk becomes too high, the loan will not be approved.

  • Loan amounts – conventional mortgages above conforming limits as set by Fannie Mae and Freddie Mac are considered jumbo loans and generally have a higher interest rate.
  • FICO score – the lowest interest rate is reserved for the highest score; the lower the score, the higher the rate the borrower will pay.
  • Occupancy – borrowers occupying a home as their principal residence are considered a better loan risk than second homes and investment properties.
  • Loan purpose – purchase transactions generally have the lowest interest rate with refinancing for better rates and terms being priced slightly higher. An even higher rate might be charged for refinancing and taking cash out of the property.
  • Debt-to-Income Ratio – a borrower’s monthly liabilities divided by their gross monthly income develops a ratio that helps lenders to assess the borrower’s ability to repay the mortgage.
  • Property Type – some types of property are considered higher risk than others which could adversely affect the rate.
  • Loan-to-value – the lower the percentage of the loan to the appraised value of the property will generally lower the interest rate.

Any combination of these factors could limit a borrower’s ability to secure a mortgage at the rate initially quoted. Pre-approval by a trusted mortgage professional can be the best way to know what rate you can expect to pay. Please call for a recommendation of a trusted mortgage professional.

Currently we have clients, who will be home buyers soon, but are in credit repair, services that good mortgage companies offer to their clients in need of increasing their credit scores. Often procedures include new credit cards that are pre-paid, paying off small debts and closing some accounts. But honestly, just by following what I just said, you might not get the right accounts repaired. So, to get the best rate, today or a year from now, do not go it alone.

CONTACT US 480-355-8645 OR email us at Info@LocateArizonaHomes.com and we will direct you to a good lender that can help get you ready.


 

Pre-approval is Good for Everyone

by Gina McKinley

Some say “CASH IS KING” in the real estate market these days and our “word” that we can afford to buy the house just does not work anymore. Sellers want to see that someone else, who has the ability to provide the funds has looked at your credit, job history and funds to make sure you can get the loan. That gets you as close as you can to having “CASH”. In this real estate market Cash is still king yet your…

Buyer’s mortgage pre-approval is good for everyone in the transaction. It saves time, money and removes the uncertainty of knowing whether the buyer will be qualified after negotiating a contract. The direct benefits include:

  • Looking at “Right” homes - price, size, amenities, locationPre-approval is good for everyone.png
  • Find the best loan - rate, term, type
  • Uncover credit issues early - time to cure possible problems
  • Negotiating power - price, terms, & timing
  • Close quicker - verifications have been made

There is a significant difference in having a trusted mortgage professional take a loan application and run all the necessary verifications compared to going through calculators on a lender’s website. Beside the peace of mind, the cost of being pre-approved is a bargain and generally, limited to the cost of the credit report.

Even if a person has been pre-approved, a second opinion from a different lender may be a good option. It can verify there is a good deal or you’ll discover that you can improve it. Either way, it works to your advantage. Contact me if you’d like a recommendation of a trusted mortgage officer.

Let us know if you need some expert advise on this, we have strong and reliable lenders that are ready and willing to help you.  Contact us at 480-355-8645 or Info@LocateArizonaHomes.com


 

3 Effective Ways to Use Video to Get Clients

by Gina McKinley

Did you know video is one of the most effective ways to get clients?

If you’re only using video to showcase listings, or if you aren’t using it at all, you’re missing out.

Many agents don’t use video because they find it intimidating.  They worry they don’t have the right equipment or they won’t be able to edit the video once it’s shot.

The good news is you don’t need any special equipment to make high-quality videos.  Your smartphone’s camera and microphone will work in almost every situation.

Your phone also might include basic editing software.  If it doesn’t, you can find free and inexpensive apps to download that make the editing process a breeze (Magisto is a great one).

Testimonials

Video is an excellent way to capture client testimonials.  Record them after executing a contract or at the closing table.  Then, upload them to social media, YouTube, and your website so buyers and sellers searching online see them.

Offline, video testimonials are best used to secure listings.  A few days before the listing appointment, email the testimonials to the sellers.  Few things can help you get listings like the glowing reviews of past customers.

Market Reports

People like to know what’s going on with the real estate market.  Using reports published by your company or the local board is good, but turning those reports into videos is better.  It gives you the chance to show your expertise and your personality.

Use your phone to shoot a quick video of you talking about the market stats.  Keep it under two minutes and be yourself.  Focus less on the numbers themselves and more on what they mean to potential buyers and sellers.

Video market reports are perfect for emailing to your database and posting to social media.  You can also send them with video testimonials as part of your pre-listing package.

Introductions

If you receive online leads, whether paid or free, consider using video to introduce yourself.  Buyers and sellers searching online often contact more than one agent.  You can set yourself apart with a personalized video.

As soon as a lead comes in (response time is critical), respond with a 10-15 second video.  Here’s all you need to say:

“Hi, this is Jane Doe with XYZ Realty.  I saw you requested more information on 123 Main St.  Would you like me to call, email, or text you with that information?”

Your video will start the conversation and you can convert the lead into a client from there.

P.S. – It might seem strange, but the most important part of your videos is the audio.  People will watch a shaky video with bad lighting, but they won’t watch one with poor sound.

Easier to Play the Game

by Gina McKinley

It’s much easier to play a game when you know the rules so you can avoid mistakes that may keep you from winning. Homeownership isn’t a game but there are some rules that will protect your investment and increase your enjoyment.

Most people want a home of their own to raise their family, share with their friends and to feel safe and secure. In most cases, it is also their largest asset. These suggestions can help protect your investment and make homeownership more enjoyable.12519621-250.jpg

  • Don’t overpay for your home
  • Maintain your home to protect its value
  • Minimize your assessed value to lower property taxes
  • Make extra contributions to save interest and build equity
  • Validate the insured value of improvements and contents
  • Be aware of current surrounding property values
  • Make mortgage interest payments deductible
  • Invest in capital improvements that increase market value
  • Don’t over-improve the neighborhood comparables
  • Keep records of capital improvement & other maintenance

We’d like to be your personal source of real estate information and we’re committed to helping from purchase to sale and all the years in between. If you need assistance with any of the items mentioned in this article or need a recommendation for a service provider, it would be our pleasure to help.

I would like to be your personal source of real estate information and we’re committed to helping from purchase to sale and all the years in between. If you need assistance with any of the items mentioned in this article or need a recommendation for a service provider, it would be our pleasure to help. And please remember, I can even connect you with someone I trust across the country. Feel free to call 480-355-8645 or email Info@LocateArizonaHomes.com

Protecting Your Credit

by Gina McKinley

One of the “big” three credit bureaus recently announced that a massive hack has exposed the personal information of up to 143 million people. To add perspective to that statement, that is about two-thirds of American credit card holders or close to half the population of the United States.  Part of protecting your credit is being vigilant and making it difficult for thieves to steal your identity. 17405556-250.jpg

If you suspect you are a victim of identity theft, an initial step is to place a fraud alert on your account. Contact one credit reporting company (Equifax, Experian or TransUnion), tell them you are an identity theft victim and ask the company to put a fraud alert on your credit file. Confirm that the company will contact the other two companies.

The initial fraud alert will make it harder for an identity thief to open accounts in your name. The alert lasts for 90-days and it can be renewed.

A more severe precaution called a credit freeze restricts access to your credit report. A credit freeze makes it more difficult for thieves to use your identity to apply for loans or credit cards in your name.

By contacting each of the three credit reporting agencies separately, you can request a temporary freeze. This would prevent them from providing credit information without both your explicit permission and a PIN that temporarily lifts the freeze.

Unlike the fraud alerts, the agencies may charge you a fee for instituting the freeze in addition to another fee to lift the freeze each time.

A credit freeze will not affect your credit score. If you are in the process of buying a home, contact your loan officer and discuss the decision you are considering. If you will be making a mortgage application in the near future, you can temporarily lift the freeze for the lender you are using.

A trusted mortgage professional is a key team member in purchasing a home. Making an appointment with them is one of the first steps along with determining your real estate professional. Contact us to get a recommendation of a trusted mortgage professional.

To request a credit freeze, you can do it online or by phone:

Equifax – 800-349-9960 | Experian – 888-397-3742 | Trans Union – 888-909-8872

For more information, see Credit Freeze FAQs at the Federal Trade Commission.

It is important to personally monitor your credit reports through annual credit report.com to discover any unusual activity.

As always, please let us know if we can help with any questions you may have.  Call us at 480-355-8645 or email us at Info@LocateArizonaHomes.com


 

Deductible Dilemma

by Gina McKinley

Phoenix area homeowners have experienced a fair share of insurance claims with the seasonal monsoons and haboobs.  Making sure we have the right amount of coverage balanced with the deductible is more math than I care to do in a month. But to be well protected one needs to do that analysis. Many folks across the country today are finding that their insurance simply does not cover the losses they are facing. Double check of your coverage with your agent, and remember…

The purpose of insurance is to shift the risk of loss to a company in exchange for a premium. Most policies have a deductible which reduces the amount of the claim that is paid by having the insured share in the first part of the loss.38973594-250.jpg

In the process of managing insurance premiums, policy holders often consider higher deductibles to lower the premium. Lower deductibles mean less money out of pocket if a loss occurs but also results in higher premiums. Higher deductibles result in lower premiums but require that the insured bear a larger part of the loss.

A small fire in a $300,000 home that resulted in $2,500 of damage might not be covered if the policy holder has a 1% deductible. If the homeowner can afford to handle the cost of repairs in exchange for cheaper premiums, it might be worth it. On the other hand, if that loss would be difficult for the homeowner, a change in the deductible could be considered.

Homes in high-risk flood areas with mortgages from federally regulated or insured lenders require additional flood insurance. However, each homeowner needs to assess the risk of being able to financially sustain a flood loss on their home when flood insurance is not required. The recent events in south Texas and Louisiana are evidence that the unexpected can happen.

It is important to review your deductible and discuss risks with your property insurance agent so that you’re familiar with the amount and make any changes that would be appropriate before a claim is made.  The FEMA website has information and frequently asked questions about flood insurance.

As always give us a call (480-355-8645) or send us an email (Info@LocateArizonaHomes.com) if you need any assistance with this or need a referral for a good insurance agent to help you walk through this process.

How to Deal with Closing Delays

by Gina McKinley

Have you ever had a closing delay threaten to kill a deal or strain a relationship with a client?

If you’re like most agents, it’s happened to you more than once.

Here are three steps you can take to prevent closing delays from ruining a transaction or a relationship.

Step 1: Prepare Your Clients

Dealing with closing delays starts with preparing your clients for them to happen.  The best time to do this is when you are writing an offer with your buyers or reviewing an offer with your sellers.

Start by explaining closing dates aren’t set in stone and may be delayed for a variety of reasons.  Then ask this question:

What would happen if this closing date needed to be pushed back?

Your clients’ answers will tell you if a potential disaster is looming.  The best option is always to negotiate a closing date that leaves flexibility on both sides, but you’ll still want your clients mentally prepared for the worst-case scenario.

Step 2: Create Contingency Plans

Once a contract is executed, buyers and sellers begin to make moving plans.  Unfortunately, they rarely plan for delays.

If you completed step 1 and asked what would happen if the closing was pushed back, you should be aware of any potential issues.  Now is the time to help your clients create contingency plans to address those issues should the need arise.

Are they able to extend their lease?  Do they have relatives or friends they could stay with temporarily?  Is the moving company’s pickup date flexible?

Your clients should have answers to these types of questions well before the closing date so chaos at the last-minute is avoided.

Step 3: Address Emotion the Right Way

Moving is stressful and no amount of preparation or planning can prevent emotions from boiling over when a closing is delayed.  Handle the situation the wrong way and the work you’ve done in steps one and two above won’t matter.

The single biggest mistake you can make when emotional clients call you is to try to offer explanations or solutions.  Emotion cannot be overcome by logic.

Let the clients vent.  Listen and acknowledge their feelings without expressing your own frustration with the delay.

Only when the clients have moved past the emotion is it time to discuss solutions and remind them of the contingency plans they have in place.

P.S. - Did you know the best time to ask for referrals is immediately after you’ve solved a problem for a client?

Following the steps above will not only help you deal with closing delays, it’ll also put you in a strong position to receive referrals.

P.P.S. - We are a top team in the South East Valley as ranked by Top Agents Magazine and RealTrends. We are currently hiring. The ideal Realtor® candidate is serious, motivated, and integrity driven. Please call us today!

Your Home's Equity Could Be the Answer - 8/31/2017

by Gina McKinley

When I got into real estate years ago, one of the first things I realized was there were months with nothing and others with plenty. Home sales were high and low, so I needed a way way to fill in the gaps, valleys and smooth the road. A Home equity line did the trick. Here is somemore…

 

A home equity line of credit, HELOC, is a mortgage loan made to homeowners to be used on an as-needed basis. A lender, such as a bank, will approve a borrower for a specified amount based on the equity in their home and all the necessary paperwork is signed to authorize the loan.43355754-250.jpg

The line of credit amount is available to the borrower and no interest is due until some or all the money is used. When the money is paid back, the line of credit is again available in full to the borrower.

The specifics of the repayment will depend on the HELOC lender. It may require interest only or it may require amortized payments of principal and interest.

The proceeds from a HELOC can be used to make improvements on the home or anything else such as medical expenses, college tuition or unexpected expenses or other liquidity issues.

Unlike personal credit card interest, the interest on a HELOC may be tax deductible. Your tax advisor will be able to let you know about your situation.

Rates and fees can vary widely on HELOC loans. Borrowers should shop around, compare and get recommendations before deciding on a lender.

The truth is that sometimes folks use HELOCs for other purposes. One purpose might be to buy an investment property or a college condo; or a kitchen update, or even add on to the house. One thing you cannot do is get a HELOC when your house is on the market for sale. SO make sure you reach out before so we can talk through your plans. Give me a call 480-355-8645 or send me an email (Info@LocateArizonaHomes.com) and let me know how I can help.

Which Value Do You Want?

by Gina McKinley

Often, when asked to help someone sell their home, or to just sit and visit about the value of their home, the true value of the conversation ends up being staying in the East Valley, versus moving elsewhere in the state or to another state. Your decision may be based upon the estimated value that I can provide you (and that may even suffice for an estate!). Should you be thinking it might be time to move, a conversation about real estate might be the best way to determine what the plans really are. But read on, there’s more…

What your home is worth depends on why you ask the question. It could be one value based on a purchase or sale and an entirely different value for insurance purposes.Values-250.png

Fair market value is the price a buyer and seller can agree upon assuming both are knowledgeable, willing and unpressured by extraordinary events. This value is generally indicated by a comparable market analysis done by real estate professionals.

Insured value is determined for insurance coverage. Homeowner policies typically have replacement clauses in them and the cost of demolition, new construction and the added complexities of matching existing construction could exceed the cost of new construction.

Investment value is based on the income it can generate during its useful life. This value is dependent on what kind of yield an investor requires to capitalize the value over time. The formula for this is to divide net operating income by the capitalization rate required by the investor.

The assessed value of a home is used to determine the property taxes the owner must pay. This value is determined by the responsible state government agency.

Homeowners are generally more familiar with their home’s market value. Since it can be lower than the replacement cost, owners should review the insured value with their property insurance agent periodically.

There can be a surprising difference in each of these separate values. It is important to know the purpose that it is going to be used for the value.

With my  experience ( since 1998) I am often asked to establish a value for a home here in the East Valley that is being managed by an estate or a trust, and they need to liquidate. A divorce can be another reason to get a value for a home as can the blending of 2 families, or the expansion of another.  Life as a Realtor here in Chandler / Gilbert area can be very diverse. So Let’s Have a conversation about real estate.  Contact me for any information on the value of your home. CALL (480-355-8645) OR EMAIL (info@locatearizonahomes.com).

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Gina McKinley
RE/MAX Masters
2390 W. Ray Road, Suite 4
Chandler AZ 85224
480-355-8645
Cell: 1-480-779-9420
Fax: 480-355-8912

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