Julianne Krutka
Park Square Realty | 413-297-6718 | julianne.krutka@gmail.com


Posted by Julianne Krutka on 10/5/2017

For the generation that grew up at the height of the subprime mortgage crisis, buying a home is a scary concept. Many young people in the 18-34 age range are dealing with high rent, a poor job market, unpaid internships, and student loans the size of a home loan. Yet, others are finding their footing and realizing that owning a home is advantageous in the long run. If you're thinking of delving into the world of home ownership for the first time here's a crash course in Home Buying 101.

Figure out your finances

You should be an expert at you and your significant other's personal finances if you are thinking about buying a home. The first thing to look at is your income and expenditures. Put the following information in a spreadsheet:
  • Total monthly income
  • Total monthly expenditures (bills, gas, food, etc.)
  • Total monthly savings
  • Total savings and assets
  • Credit and FICO score (request both of these online)
When crunching these numbers you should (hopefully) find that your income is higher than your expenditures and your savings should account for most of the difference. If your savings is lower than it should be, you either missed something on the expenditures list or you are spending more than you should be if you want to buy a home. Down Payments Down payments on a home, post-financial crisis, range from anywhere between 0-25 percent of the price of the home, 20 being the median. A down payment ideally†shouldn't break your savings in case you have any unforeseen expenses once you buy your home. Moving is time-consuming and can be pricey, so you'll need to account for this in your finances.

Lock Down Your Financing

There are several types of mortgages†that you'll need to choose from, and you'll want to learn†about fixed and adjustable†mortgage rates. This information should be informed by your long-term plans. Are you looking for your†first home or your forever home? If you don't plan on fully paying off the home you might look for a low, adjustable rate while you earn money. But if you want to stay in your home until it's paid off, a fixed rate might be better for you.

Finding and buying your home

Once you've determined your price range, start thinking about things like location and the kind of home you can afford. If you're handy with tools and have the time, it might be in your best interest to buy a home than needs some work at a lower cost. If you'd rather put in more hours at work, go with the home that needs less work and save money that way. Depending on whether or not you're in a buyer's market or a seller's market, the ball can be in your court or the seller's. In a seller's market, which is more likely today in many parts of the country, the seller will have more leverage in negotiations, including closing dates and move-out dates. Due to high competition, you should also be prepared to miss out on some offers. But be patient, and you should find the home†you're looking for.  





Posted by Julianne Krutka on 6/22/2017

If youíre in the market to buy a home, youíre probably learning many new vocabulary words. Pre-approved and pre-qualified are some buzz words that youíll need to know. Thereís a big difference in the two and how each can help you in the home buying process, so youíll want to educate yourself. With the proper preparation and knowledge, the home buying process will be much easier for you.  


Pre-Qualification


This is actually the initial step that you should take in the home buying process. Being pre-qualified allows your lender to get some key information from you. Make no mistake that getting pre-qualified is not the same thing as getting pre-approved.


The qualification process allows you to understand how much house youíll be able to afford. Your lender will look at your income, assets, and general financial picture. Thereís not a whole lot of information that your lender actually needs to get you pre-qualified. Many buyers make the mistake of interchanging the words qualified and approval. They think that once they have been pre-qualified, they have been approved for a certain amount as well. Since the pre-qualification process isnít as in-depth, you could be ďqualifiedĒ to buy a home that you actually canít afford once you dig a bit deeper into your financial situation. 


Being Pre-Approved


Getting pre-approved requires a bit more work on your part. Youíll need to provide your lender with a host of information including income statements, bank account statements, assets, and more. Your lender will take a look at your credit history and credit score. All of these numbers will go into a formula and help your lender determine a safe amount of money that youíll be able to borrow for a house. Things like your credit score and credit history will have an impact on the type of interest rate that youíll get for the home. The better your credit score, the better the interest rate will be that youíre offered. Being pre-approved will also be a big help to you when you decide to put an offer in on a home since youíll be seen as a buyer who is serious and dependable.  


Things To Think About


Although getting pre-qualified is fairly simple, itís a good step to take to understand your finances and the home buying process. Donít take the pre-qualification numbers as set in stone, just simply use them as a guide. 


Do some investigating on your own before you reach the pre-approval stage. Look at your income, debts, and expenses. See if there is anything that can be paid down before you take the leap to the next step. Check your credit report and be sure that there arenít any errors on the report that need to be remedied. Finally, look at your credit score and see if thereís anything that you can do better such as make more consistent on-time payments or pay down debt for a more desirable debt-to-income ratio.





Posted by Julianne Krutka on 1/19/2017

Making the decision to buy your first home is a big step. One of the most uncertain parts thatís involved in buying a home is that of securing a first-time mortgage. Youíll need to know what types of programs exist to help you on your journey to homeownership. Even if you have owned a home in the past but are now renting your home, you may be eligible for first-time mortgage benefits. 


The first thing you should do is understand your options for getting a mortgage. The Department of Housing and Urban Development often provides you with agents to help you see whether you will, in fact, qualify for a first time mortgage and all the benefits that go along with it. They may also help you to see exactly what programs will work best for you. You can find agencies in your specific area on the HUD website. 


Each state and local municipality have its own resources for those seeking to buy a home as well. These programs may get more specific, helping low-income earners, first-time home buyers and people with disabilities. Of course, youíll need to meet certain eligibility requirements before qualifying for the programs. Your state and local housing offices are other great places to start when youíre searching for benefits for first-time home buyers.   


Save, Save, Save! 


Even before you think you might be ready to buy a home, you need to start saving. Youíll need a significant down payment, especially if youíre hoping to avoid private mortgage insurance or PMI. If you canít swing a 20% down payment, thereís good news: First-time home buyers are eligible for loans that require a lower down payment- as little as 3%! 


Youíll also need a significant amount of savings to pay upfront for closing costs. These fees can come in somewhere between 3 and 4% of the purchase price of the home. It wonít be very pleasant if your bank account is completely empty by the time you reach the closing table. This is why itís a wise idea to save long before you even think you might want to buy a home.      



Look At Your Finances


In the same light of saving money, youíll want to keep your financial health in check in order to prepare to secure your first mortgage. First, check your credit score and see where you stand. You can take the time to dispute any discrepancies you may find on your report. Then, start paying off any credit card balances that you may have. Remember that the higher your credit score is, the better your chances are of securing a mortgage and being approved for a first-time home buyer program.





Posted by Julianne Krutka on 12/15/2016

Who wouldn't like to pay off the mortgage early? Getting rid of mortgage debt will allow you the security and the psychological benefit of owning your home free and clear. There are lots of ways to accomplish these goals. Here are some suggestions on ways to get rid of your mortgage debt. Compare the options and do what works best for you. 1. Add more money to your monthly payment. This will help pay down the principal balance shortening the length of your loan. When you pay more on your principal is gets lower, and the lower your principal gets, the more every payment from then on is applied to principal, as less goes to cover interest expense. 2. Refinance. Refinance your mortgage to 10, 15 or 20 years. Your payments will be higher on a 15-year loan, but often the rate is lower and the loan is paid off much quicker. If you are afraid to take out a 15- year loan take out a 30-year loan, but make payments as if you had a 15-year loan. 3. Make biweekly payments. Most banks have a biweekly payment plan. Since there are 52 weeks in the year if you pay half your regular mortgage payment every other week, you'll have made 26 half-payments, or 13 payments. There are options when it comes to owning your home free and clear. Just decide which one works for you and be on your way to being mortgage free.





Posted by Julianne Krutka on 12/1/2016

When youíre shopping for a home, thereís so much to consider. Between the questions of what neighborhood you should live in and what style house you like, you need to think of the most important thing: finances. When you think that youíre financially ready to buy a home, you often will get the notion that itís a good time to just start shopping. Thereís several steps that you must take first before you start shopping for a home. One of the first steps you should consider taking before you make the leap into home ownership is to get preapproved. While buyers still tend to skip the preapproval process, doing this can help you immensely throughout the home buying process. While it may seem an insignificant and kind of boring step, getting preapproved is important for your finances. It may even help you to land in a home that you love faster. Itís actually detrimental to make an offer without a preapproval, because some lenders wonít accept an offer without one. Many realtors verify and require that offers come along with the stamp of preapproval. What Does Getting Preapproved Involve? You may have heard of a prequalification. This is much different from being preapproved. Prequalification involves buyer provided information, just to get a sense of how much they can spend on a home. Preapproval involves credit scores, bank statements, tax returns and more. This process states exactly how much lenders will be willing to give to the borrower. All of the documents needed for preapproval are the same exact documents needed for a mortgage. This helps you as the borrower prepare ahead of time as well. These are some of the kinds of documents that youíll need for preapproval: Pay stubs W-2s from the previous year Federal tax returns from the past two years Two Months of Bank Statements from all of your accounts A credit report While a preapproval is only one step in the long process of buying a home, it speeds up the later steps of securing a mortgage. The process also helps buyers face their financial reality. Donít put off the important process because you fear that you wonít be approved for the amount that you need. Itís also common for buyers to assume that because someone they know has been approved for a certain amount of money that they will be able to get that same loan amount as well. This isnít always the case and another great reason to get preapproved. Errors On Credit Reports Often, there are errors on credit reports. Thatís why you need to check them often. If you have some errors on your credit report, getting preapproved is a great way to check if there are any errors and give you time to fix them before you apply for a mortgage.




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