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Know Before You Go: Preparing Your House for Vacation

What to plan for when preparing your house for vacation.

The weather is warming up, the trees are regaining their green, and the kids — if you have any — are hauling toward spring break at breakneck speed. For some families, that means vacation to a distant destination, like a certain mouse-sponsored amusement park, perhaps? For others, vacation means a quick road trip to visit in-laws or other nearby loved ones. Either way, vacation of any kind means leaving your home for a number of days. And while smart technology has made taking care of ourselves and our homes easier, there are still a few things you need to do manually when preparing your house for vacation.

Clear fridge, full bellies, can’t lose.

We’re not recommending you eat everything in your fridge before making a mad dash for departure, but food doesn’t stay fresh forever. Milk, meat, produce, and other food items that go bad quickly should be consumed, composted, or straight up canned if you’re not going to be home for an extended period of time. Imagine coming back from one tropical ecosystem to find another green ecosystem growing in your fridge. *Shudders.*

Keep it clean.

If you’re anything like us, you know that there’s nothing quite as comforting as coming home to a clean home. After all, the last thing anyone wants to do is drag their luggage inside and lose it among a field of laundry. Worse still, walking into the stench of week-old dishes. If that sounds like something you’d like to avoid, consider the following:

  1. Load, run, and unload your dishwasher. When it’s done, leave it cracked to let the steam escape and help the remaining water evaporate completely.
  2. Don’t forget the load in the washer. Look, who doesn’t let the dishes sit overnight every now and then to help get the gunk up? Unfortunately clothes don’t work the same way. Once they’ve been washed, you’re going to want to throw them in the dryer or hang them up to dry ASAP. Otherwise you’re looking at coming back to a moldy, stinky pile of wet clothes.
  3. Wipe it down, vacuum it up. You might be on vacation, but bugs and rodents might see your empty home as a hotel. To keep these uninvited guests out, consider wiping down all the countertops and vacuuming up any debris in high-traffic areas.

Leave a light on. Turn everything else off.

We’re not huge fans of waste around here, but when it comes to keeping your home and your belongings safe, leaving a light on is one of the best ways to keep ne’er-do-wells off your property. A single light in the living room or bedroom should suffice, but if you’re running a high-tech home you might consider scheduling different lights to turn on and off at various times while you’re gone for that extra measure of safety.

As for everything non-essential? Turn it off. Things like fridges, freezers, and pet feeders can stay on. Things like game consoles, microwaves, ceiling fans, coffee machines, and wax warmers can be turned off or unplugged to temporarily reduce your footprint (and your utility bill).

While you’re at it, don’t be afraid to turn off your thermostat if the house is going to be completely empty. Unless your pets are staying back, who’s the A/C running for?

Finishing touches.

One of the simpler recommendations we have for preparing your house for vacation is to wash your sheets, pillow cases, and comforter. Once those are dry, make your bed. Why? Wouldn’t you rather crawl into a clean bed than one that’s been sitting in your sweat and skin cells for upwards of a week or more? Your mattress may not live up to a hotel mattress, but that doesn’t mean you shouldn’t give yourself something to look forward to when you get back.

While smart technology has made taking care of ourselves and our homes easier, there are still a few things you need to do manually when preparing your house for vacation.

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How Much Mortgage Can I Qualify For?

What is “DTI” and how does it influence how big my mortgage can be?

We’ve all done a bit of hypothetical house hunting before, right? You’re up late. You’re curious. You want to see if that dream house is on the market, just waiting for your mortgage. So you hop on your favorite listing site or you drive around neighborhoods ooh-ing and ahh-ing (or ew-ing) at different styles.

At this point, you know what you like and you know what you want, but when it comes to finding out how much you can afford? You’ve got no idea where to start.

Deep breath. That’s not a bad thing—it actually means you’re just like hundreds, if not thousands, of other like-minded future homeowners who are asking themselves the very same questions.

“Okay, but how much mortgage can I really qualify for?”

Glad you asked. Just out of curiosity, how’d you do in math class?

Kidding. Sort of. Turns out, there is a bit of math involved in figuring out how much money you might be able to borrow to finance your home purchase.

In our world, there’s this thing called the “29/41 rule” (or the 28/43 rule, or the 28/36 rule…honestly, jury’s still out on which one it is, but different loans may follow different rules). If your numbers exceed these percentages, the odds of you being approved for your mortgage decrease substantially.

Loosely speaking, this refers to two things:

  1. The first number represents the suggested gross (pre-tax and other deductions) monthly spending on your mortgage payment. It should take up no more than that number, as a percentage, of your gross monthly income. If you make $8,333 per month (or $100,000 per year) you shouldn’t spend more than roughly $2,400 on your mortgage payment.
  2. The second number refers to the gross monthly expenditure on debts—things like student loans, car payments, credit card payments, etc. Again, if you’re making $8,333 per month, your debt expenses shouldn’t be more than a little over $3,300. Note: This debt percentage includes your future mortgage payment.

These figures are determined by formulas. Not the fancy ones you see written on chalkboards, but relatively straightforward ones like the following, which is used to determine your DTI—or “debt-to-income” ratio.

How to calculate DTI

Installment Debt + Revolving Debt / Gross Monthly Income x 100
(Note: Disregard PEMDAS for this formula. Dear Aunt Sally has no control here.)

So, hypothetically, if you had monthly installment debts (things like credit cards) of $200 and monthly revolving debt payments (for car payments, mortgage payments, student loans, etc.) of $2,400, you’d have a total of $2,600 of monthly debts.

Now let’s say you made $100,000 per year, either as a single person or as a family. Divide that by 12 and you’d get a gross monthly income of about $8,333.

$2600 / $8333 = .031201248

Multiply that by 100, and you’d get 31.201248—or a little over 31%—which is below the suggested 36, 41, or 43% recommendation. Fortunately there are computers that do this math for you, so you shouldn’t ever have to worry about it.

Your DTI helps lenders figure out your ability to pay back your mortgage. The lower your DTI, the more room you have for a mortgage payment and other expenses. More room, more mortgage. More mortgage, more home. You see where this is going? DTI has a direct impact on how much money you’ll be allowed to borrow for your home purchase, and a higher DTI can limit how much you’ll be able to borrow.

No matter what, it’s important to remember that while DTI is one component of your mortgage application, it’s just a glimpse of where you’re at right now—not what life, and your financial situation, will be in the future. People get raises, cards get paid off, vehicles need replacing…situations change, for better or for worse.

So while you might be able to afford a certain amount per month, many experts suggest planning ahead as much as possible. This often means targeting a payment that’s less than what you can afford right now to leave room for what could pop up in the future.

Great…what’s next?

One of the best ways to figure out how much mortgage you can afford is to obtain a pre-qualification. Before you get too excited (or too anxious), keep in mind that a pre-qualification is not a pre-approval. We’ve covered the difference extensively in the past, but here’s the gist:

  • Pre-qualification: When you submit basic information to get a rough budget for your home purchase.
  • Pre-approval: When a lender completes a full review of your information (credit score, income, assets, etc.) and extends a preliminary loan offer.

Once you obtain your pre-qualification number, run it through your personal budget and see if it’s something you can comfortably afford. Don’t forget to leave room for variables, however unknown they may be.

From there, the rest is up to you. Feeling confident? Connect with the experts at NAF Financial to request a free rate quote and start the journey toward homeownership today.

Target a payment that’s less than what you can afford right now to leave room for what could pop up in the future.

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A Brief History of Mortgage Etymology

We’ve got a thing for words (in case you couldn’t tell), so we thought we’d take a break from our usual mortgage content to touch on our shared love. Don’t worry, it’s still related to mortgages — but for all you word nerds out there looking to purchase or refinance a home, this blog’s built for you. This week, we’re discussing mortgage etymology and the history of home loans.

Etymology: The origin of a word and the historical development of its meaning.

You might be surprised to learn that the concept of mortgages — home loans — is fairly intertwined with American history, dating all the way back to the 1700s. You may be even more surprised to learn that mortgages date back even further than that. In fact, the earliest use of “mortgage” as a term to describe a long-lasting deal dates back to 14th century France, according to our friends at the Online Etymology Dictionary.

But what’s it mean? Sure, the concept of mortgages is old, but why don’t we just call them “home loans”? What does “mortgage” even mean?

The Dead Pledge: Mortgage Etymology

Like most words, “mortgage” can be picked apart to uncover its true, or original, meaning. Its French origins can actually be traced back to Latin and early German language. In Latin, “mortus” (or “mortuus”) means “dead.” “Gage” stems from the early German vocabulary which translates in old French to “pledge.” When brought together, the word effectively translates to “dead pledge” — called so because, according to the Online Etymology Dictionary, “the deal dies when the debt is paid or when payment fails.”

These days, mortgages work similarly. Once a mortgage is paid off, the house belongs to the buyer. Alternatively, should the buyer forego payments…well, that’s another way the deal could “die”, so to speak. Except these days we call that defaulting on a loan, which ultimately leads to foreclosure.

Comparing These Days To Those Days

Seems backwards to say, but the Great Depression may have actually been a good thing for this country — or, at the very least, a necessary wake up call. The Great Depression led to the creation of the Federal Housing Administration (FHA), which aimed to reduce risk, protect lenders, and promote fairer lending practices to borrowers regardless of background.

To do so, FHA-insured loans came with a handful of…well, let’s call them prerequisites. These “prerequisites” included stringent quality standards, lower down payment requirements, extended loan terms (15 to 30 years, compared to three to five in years prior), and amortization — which means basically means you work on paying down more of your loan’s interest first, while paying off principal debt later.

Where older mortgages saw buyers paying interest only over a period of time, followed by a balloon payment to repay the principal, amortization saw buyers paying interest and principal simultaneously over time.

Modern Mortgage

Modern mortgages are somehow easier and more difficult to obtain. Thanks to the Great Recession (remember 2008?), the market needed regulation. Lenders needed to qualify prospective buyers before handing out mortgages, so the process is certainly more involved than it used to be. For good reason, though — most lenders just want to make sure buyers can afford what they’re borrowing.

At the same time, the digital age has seen an influx of speedy online lenders boasting streamlined experiences. Mortgages are more accessible than ever, but regulations have made them subject to stringent requirements. Like most things in life, it’s give and take.

Those Who Don’t Learn From History…

You’ve heard the old adage. Luckily, thanks to modern mortgage requirements, you aren’t doomed to repeat the mistakes of mortgages past. You know where mortgages come from, you know how they’ve changed over time, and you’re already here.

Maybe you’re ready to buy a house, or maybe you’re just weighing your options. Either way, our team is ready to help you make home happen wherever you’re at in the process.

Mortgages are more accessible than ever, but regulations have made them subject to stringent requirements. Like most things in life, it’s give and take.

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Wondering What to Look For in a Mortgage Lender? We’ve Got the Answers.

Worried about what it takes to buy a home? Overwhelmed by the number of lenders out there? Good news: If you’ve ever purchased a car, you’ve probably got a good idea of what’s coming. Although the two experiences differ in some ways, they’re more similar than you might think.

When you decide to buy a new car, you’re likely researching a lot of things. First and most obvious, the car you want. Second, the dealership you’re buying from. In this step, you’re probably looking at several different dealerships, and for good reason: No two dealerships are alike, and they all seem to offer varying benefits.

For example: One offers free oil changes for life, another offers free inspections for two years, and the third offers a limited powertrain warranty. The dealership you decide to buy from should offer a distinct intersection between availability, price, and benefits.

Don’t worry, we’re not here to guide you through the car buying process—but when you’re looking for a mortgage professional, you should shop around as much as you do when looking for a new car to try and find a similar intersection.

What To Look For in a Mortgage Lender

Not only are there different types of lenders, there are a host of different mortgage products available, and not every lender has the same access to the same loans. And, because many lenders operate on different platforms, the technology they use might influence your buying timeline, the lender’s decision, and even your rate.

In this great big financial ocean, it’s easy to get lost at sea, floating from option to option. We’re here to help you find your direction—your NAF Financial direction, if you know what we mean. Read on to find out what to look for in a mortgage lender.

What’s Your Type?

One of the first things to look at is the type of mortgage professional you’re working with. And trust us, there are plenty of options out there. Here’s a brief look at a few of the most common options—mortgage brokers and direct lenders.

Pro-Tip: Direct lenders and mortgage brokers are not the same thing. Lenders are businesses that offer home loans. Brokers are businesses that serve as aggregators, providing various quotes from multiple lenders. At the end of the day, it’s a matter of personal preference.

Direct Lenders
Unlike brokers, direct lenders use their money to originate loans. That often means you’ll benefit from better rates and lower upfront costs, as well as a one-to-one relationship with the lender across every touchpoint of the process. However, it’s important to consider that working with a direct lender means you’re limited to their own products. Because loan applications appear as hard pulls on your credit report, shopping around with multiple direct lenders—or going to a second after the first wasn’t able to approve you for one of their loan options—could affect your credit score and subsequent approval odds.

Mortgage Brokers
Matchmaker, matchmaker…find me a loan? While mortgage brokers do not originate loans themselves, or put up any of their own money in the process, they act as an intermediary of sorts—connecting borrowers with potential lenders to provide a handful of options from other lenders. Because of this, brokers are often paid via broker fees (paid by you, the buyer) and through partnerships with certain lenders who might “pay to play” for higher visibility over other lenders.

Online Lending
Thanks to advances in lending technology, many lenders are turning to wholly digital solutions that allow the process to be completed mostly—or entirely—online. Depending on who you work with, you may miss out on the traditional person-to-person interaction, but you’ll benefit from streamlined communication and faster origination. Most online lenders fall into the direct lender category, and brokers may provide quotes from those same lenders. NAF Financial offers a hybrid model, providing online capabilities while matching you with a loan professional for a personalized lending experience.

Strengthen Your Search With These Five Tips

Whether you decide to stick with that traditional bank mortgage or a modern online mortgage, knowing the type of lender will only get you so far. When it comes to making a decision, there are a handful of other things you should consider as well. Shopping around for a mortgage professional? Keep these five tips on hand:

  1. Technology
    What kind of technology, if any, do they use? These days, many loans can be completed 100% online. Of course, if you choose to roll with an online lender, your experience will only be as good as their tech. That’s why we love Octane, our proprietary home loan platform built with borrowers in mind and offering a more efficient process for faster closings.
  2. Service
    You will, inevitably, speak to someone when applying for a loan. You don’t want an interaction with a call center talking head who’s reading from a script. You should look for a lender who’s empathetic to your circumstances and willing to explain any and everything along the way. This is your home loan, after all—you’re paying for it and you deserve top-shelf service.
  3. Credit
    Low scores don’t have to keep you from buying a home, but different loan options require different credit scores. Before you apply for a loan, know your credit score. Trust us, the lender will ask about it. The more you know, the more they can help. You might even qualify for a program or grant that could put a home loan within reach. This tip also goes back to service: You want empathy, not a lender who’s going to turn you away or make you feel bad about your circumstances.
  4. Finances
    Two things (almost) every home loan will require: A down payment and closing costs. These aren’t small chunks of change, and often seem daunting to borrowers. Before you apply for a loan, it’s important to know how much you’ll be able to put down for your home purchase. To that end, it’s critical to know what kind of closing costs you’re looking at.
  5. Rates
    This is one of the most important reasons to shop around and obtain pre-qualifications (not pre-approvals, those are different) from various lenders. Depending on your home’s location, your debt-to-income ratio (i.e. your monthly debt payments divided by your gross monthly income) and a handful of other factors, different lenders may offer different rates and terms for your home loan. While a 1% difference between rates may not seem like a lot right now, it could equate to thousands of dollars saved—or wasted—over the life of your loan.

Finding a Home Loan Expert You Love

You may have a mortgage professional in mind, or you might be starting your search from scratch. But now that you know what to look for in a mortgage lender, you should feel more prepared to begin your journey.

Still looking for the right lender? Not to toot our own horn, but we’re pretty confident in our ability to check all the right boxes. Connect with the experts at NAF Financial to get your pressing questions answered and find out what kind of loan options you might qualify for.

In this great big financial ocean, it’s easy to get lost at sea, floating from option to option. We’re here to help you find your direction—your NAF Financial direction, if you know what we mean.

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Five Steps to Sell: Your House Selling Checklist

Ready to sell? Keep this house selling checklist on hand.

As you might imagine, selling a home isn’t exactly as easy as selling a car. In an ideal world, we’d exchange keys for cash, sign some paperwork, and call it a day. Needless to say, it’s more involved than that.

That’s why we put together a handy little house selling checklist to help you prepare for your upcoming listing. Before making any major decisions — and trust us, selling your home is a major decision — run through this list once or twice (go ahead and print it too, just in case) to make sure you’re in a prime position to sell.

Declutter, depersonalize, disassociate.

The first box to check in our house selling checklist is also the most difficult. When you decide to sell your home, it’s important to free yourself of any sense of ownership. The less attached you are, the better.

Depersonalizing your spaces can go a long way in helping you disassociate. And, in doing so, will help you declutter the home. We recommend clearing out your closets, boxing up bric-a-brac, and tucking away non-essential trinkets that can distract buyers from the beauty of their future home.

The home shouldn’t be sterile, but less you means more opportunity for buyers to see them in this space.

Remember: This is your home right now, but you’re simply an occupant in their future residence.

Professional photography

You know what’s always frustrating? Looking at houses online and finding listings with only one picture, or worse, pictures that look like they were captured on an old brick phone. We’re talking blurry photos, bad lighting…the whole nine.

Hiring a professional photographer is a must if you want to attract buyers and expedite your sale. Professional photographers capture your home’s best angles and most attractive features in the most flattering light, making it easier for buyers to envision themselves in the space.

Going above and beyond, some professional real estate photographers are equipped with drones, meaning they’re able to capture the home and its surroundings from different angles. These photos show buyers how much real estate they’d be buying, all-inclusive of the home and the lot it sits on.

Create curb appeal.

When folks come around for in-person visits, your home’s exterior appearance is often the first — and most important — impression.

What’s that mean for you?

For starters, gather the family for a day of yard work. Rake up leaves, mow the lawn, clear out any toys, and remove any personalized decorations (i.e. flags) that might confuse or put off potential buyers. We’d also recommend trimming branches and bushes to create a clear view of the home’s exterior.

You don’t need full landscaping, but lively flowers and a good powerwash can go a long way in setting you up for a successful sale.

Clean, paint, repair.

A functional home is a sellable home. When potential buyers tour your home, they probably want something they can see themselves moving into quickly and without much hassle. For your sake, that means thoroughly (and regularly, depending on how long your home is on the market for) cleaning the spaces people see most often and the ones you’ve likely forgotten about — hello baseboards, am I right?

Additionally, you’ll want to touch up any scuffs with a fresh coat of paint. Accent wall? Reconsider it. You may love that distinct shade of purple — or whatever color you picked — but buyers may hate it. Aim for something neutral.

Lastly, don’t forget to make minor repairs. Faceplates, doorknobs, lightbulbs are all things you’ll want to ensure are in working order. Imagine touring a house, turning a knob, and having it snap clean off. Yikes.

Pets vs. plants

One might think that including pets in a home’s photos would set a familial, comforting tone for prospective buyers. Unfortunately, not everyone loves animals. When some people see animals, they imagine the worst. Will the home smell like a wet dog? Or worse, a litter box? Will there be dander and fur circulating through the vents? What about stains and scents that have seeped into the carpet, or worse, hardwood floors?

Consider swapping pets for plants. Greenery is always a welcome addition for its ability to freshen up a space and create a sense of calm. If live plants aren’t your thing — or if you weren’t blessed with a green thumb — a few plastic plants should work just as well.

Be mindful of the market.

Feeling like you’re ready to start your journey as a seller? Great! Wondering what’s next? That depends on the market you’re in.

Pause. Rewind. We’re going all the way back to school for a little lesson on economics (fun stuff, I know). In real estate, you’ll hear the terms “buyer’s market” and “seller’s market” flung around a lot. People don’t usually explain what they mean. They sort of just expect you to get it as if it won’t have a substantial impact on the entire process. Not just how long it takes, but how much money you’ll be able to get for your home as well.

Fluctuations in the real estate market are commonplace, so the difference between a “buyer’s market” and a “seller’s market” comes down to a thing called “supply and demand.”

What’s a buyer’s market?

A buyer’s market is when there’s more supply than demand — meaning there are more homes for sale than there are people interested in buying them. A buyer’s market also affords prospective buyers more time to scout things out — allowing them to make educated decisions about what can truly be a life-changing investment.

What’s a seller’s market?

Conversely, a seller’s market occurs when there’s more demand than there is supply. Fewer homes on the market with plenty of interested parties ready to snatch them up at a moment’s notice.

In a seller’s market, competition is a real thing and buyers are often forced to fight for the home they want. For sellers, this can mean a greater number of offers and an even greater profit (especially if they put our house selling checklist to work — wink wink).

Ready, set, sell.

Knowledge truly is power, and now that you’re equipped with the knowledge of how to set yourself up for a successful sale in any kind of market, you’re ready to list. Get in touch with a trusted real estate agent and, if you’re selling one home to buy another, consider connecting with the experts at NAF Financial for help financing your next home.

Before making any major decisions — and trust us, selling your home is a major decision — run through this list once or twice to make sure you’re in a prime position to sell.