For most people across North America, buying a home or property with cash is not possible. Because of this, banks and other lenders offer mortgage loans to those that qualify. A mortgage loan isn't a bad thing; it's a way for many people to be able to own a home. As with any popular subject, there are some common myths surrounding mortgage loans. While not every buyer will need a mortgage, it's important to discern the myths from the facts when it comes to modern mortgage loans.

Twenty Percent Down Payment

This is one of the most popular myths surrounding mortgage loans, and it's also one of the most outdated. While it may have been a requirement many years ago, a buyer does not need to have 20 percent of a home's purchase price in order to qualify for a loan. While it may be financially better to put down 20 percent, there are a number of different loans and options that allow potential buyers to get a mortgage with less than 20 percent down. In the U.S., an FHA mortgage for first-time buyers requires a minimum 3.5 percent down; VA mortgages allow for zero down; USDA home loans require nothing down; and a number of other programs allow buyers to put anything from 3 to 10 percent down. If you're thinking of buying a home and you know you'll need a mortgage loan, don't be fooled by the 20 percent myth: there are many mortgage options available to buyers today.

Prequalifying Guarantees A Loan

It may seem like, with the steps you go through to get pre-qualified, a mortgage loan will be a sure thing. But that's not the case. Prequalification is not preapproval. Prequalification is the initial step in the mortgage process, and while an important step as it can provide an idea of a potential mortgage loan amount, it is not the actual approval. Prequalification generally only uses basic financial information and is not a guarantee of a loan. Preapproval is a more thorough process that generally involves looking at your financial statements and credit report. Before you begin your home search, get preapproved to ensure you're looking at properties that fall within your budget.

Need Excellent Credit

There are a number of factors that go into mortgage approval, and while creditworthiness and debt-to-income ratio are both considered, you do not need to be 'excellent' in either of these areas in order to get a mortgage loan. The minimum credit score necessary for a conventional loan in the US is 620; for a traditional mortgage in Canada, it's 680. As for debt-to-income (DTI) ratio: while it's best to have as little debt as possible when looking to purchase a home, Fannie Mae and Freddie Mac (government-sponsored agencies that publish standards for conventional mortgage approval in the U.S.) have the maximum allowable DTI at 50 percent, meaning those with current debt are not at a loss when it comes to qualifying for a mortgage loan.

Only Get The Advertised Rate

It's often said if it's too good to be true, it generally is. The same can be said for mortgage interest rates. When looking for a loan, interest rates will be listed online, in newspapers, and wherever else lenders advertise. Those advertised rates will be appealing to buyers, but the reality is that most of the time advertised interest rates are only reserved for those who have a perfect credit score, have an incredible debt-to-income ratio, and are likely putting down a very large down payment. Interest rates are influenced by a number of factors, which of course aren't included in the advertisement (just in the incredibly small fine print); because of this, go into the mortgage loan process with the understanding that you may not receive the advertised interest rate.

Down Payment Covers Closing Costs

When buying a home with a mortgage, there's always talk of a 'down payment,' which for most buyers is a large chunk of money paid up front and ultimately lowers the final amount of a mortgage loan. But while this IS a large payment, it does not cover closing costs. Closing costs are the processing fees paid to the lender in exchange for creating and finalizing the loan. They are due when you close on the loan, but they are separate and independent of the down payment. Closing costs can range from 2% to 6% of the total loan balance. Buyers do have the option of negotiating with the seller on covering closing costs, but it's never a guarantee and some locales limit the amount the seller can contribute. As you're looking for homes and understanding the mortgage process, remember to account for closing costs in your calculations.

Mortgage loans can be confusing and intimidating, especially with the number of myths out there about them. If you still have questions, your agent can help or refer you to someone with more knowledge - they may even have a lender they’ve worked with and recommend. Buying a home with a mortgage loan is still widely popular throughout North America - don’t let the myths fool you out of achieving the goal of home ownership.

It's a New Year, and homes and properties are available all over North America. You can check out the local real estate market here at hutch4home.com. If you're thinking about buying or selling this year, don't hesitate to contact me with your questions.

Prepping Your Home for Winter

Winter weather is upon us, and whether you live north or south, prepping your home for winter is a must. The tips below are easy to implement and will help ensure your home is prepped and ready for the months to come.

Insulate Pipes

For those with extreme weather, a task that is often overlooked by many homeowners, but can help prevent potential big issues, is wrapping your home's pipes. Pipes can break when water freezes and expands. To help insulate pipes, wrap with pipe sleeves or pipe tape from your local hardware store. For those living in harsh winter climates, a heating cable is a good option. Remember: it's not just exterior pipes that could freeze - any pipe that is in an unheated or poorly insulated portion of your home is at risk of freezing in the winter.

Clean Gutters

Winter weather can wreak havoc with your home's gutters. Before the weather gets really bad, ensure you clean them out. Not only do the gutters take a lot of weight if you live in a snowy climate, they can also contribute to water damage if the snow and ice inside are allowed to melt and refreeze night after night. Whether you do it yourself or pay someone else to do it, clearing out the debris in your gutters is a must.

Reverse Ceiling Fans

Ceiling fans are a great asset when you need to cool a room, but they're also beneficial in the winter. When the days get cooler, reverse a fan's direction in order to help push warm air down. Ensure the fan is off, then click the switch above the blades to reverse the direction. This will help warm air circulate and heat your room more efficiently.

Tune Up Home Systems

Winter can really test your home's heating systems. Now is the perfect time to get your furnace inspected, tuned up, and replace the filter to help ensure your home has no heating issues in the coming months. If you have a fire place (either wood or electric), get it inspected and/or cleaned. For wood-burning fireplaces, an inspection will help check creosote buildup, which left unchecked can cause health issues and is highly flammable. With many people inside due to colder weather, it's also an ideal time to replace the batters in your smoke and carbon monoxide detectors and test the units to ensure they work without issue.

Prepare An Emergency Kit

Winter is known for inclement weather, and whether you have to worry about snow, ice, or rain, having an emergency kit ready and accessible is important. Stock your supply with flashlights and batteries, weather radio, non-perishable foods, and a portable power bank to help recharge important electronics. If you have room in your budget, you can also invest in a generator if you want to ensure you have backup power in case of a power outage.

Winter is upon us. Whether you live in a sunny climate or are prone to blizzards, now is the perfect time to get your home prepared for the coming months. Send additional suggestions on winterizing your home my way.

Increase Your Home's Resale Value and Marketability With These Simple Upgrades

Although real estate markets across North America are seeing a slight slow down, there are still plenty of homeowners looking to sell their homes. But what can you do to help make your property stand out? Simple home improvements and renovations are an easy way to boost your property and capture the attention of buyers across the board. Invest in your home's appearance by prioritizing some of these simple renovations/upgrades to help increase your home's marketability and overall value when it hits the market.

SIMPLE AND ATTAINABLE FIXES

Garage Door Replacement

For those homeowners with a garage, an outdated or broken garage door can be an appeal killer to potential buyers. The good news for sellers is that a garage door replacement in 2022 has the highest return on investment (ROI) for remodeling projects at 93.3%. The benefits of replacing your garage door are two-fold: not only does it help with your home's overall curb appeal, a new garage door can increase your home's security, is more energy efficient, and newer models come with features to protect people and animals from accidental injury.

Entry Door Replacement

Another project that can help boost your home's curb appeal and overall market value is replacing the entry door. One of the most important aspects of your home is the front door as it's the first thing buyers look at as they walk into the house. Broken, dented, and decaying doors can immediately sour a potential buyer's interest, so making the small investment in a new door is a great idea if your home is sitting on the market. 2022 numbers have "entry door replacement" at a ROI of 63.8%, meaning it's a sound investment if your property needs a boost with buyers.

Landscaping

Not every seller has a yard, but for those that do, investing in landscaping is an easy way to boost your home's overall appeal and capture the eye of potential buyers. Across North America, agents have reported buyers attaching more value to a home if the yard is landscaped. NALP members and REALTORS in NAR's 2018 Remodeling Impact Report: Outdoor Features ranked a standard lawn care service as the number one project that appeals to buyers, and that landscape maintenance and tree care recovered 100 percent of the costs at the time of sale. Depending on the size of the yard, sprucing up your property's landscaping can be a good way to boost value and help develop more interest in your listing.

BIGGER HEAVY HITTERS

Minor Kitchen Remodel

Kitchens are one of the most used rooms in a house, and many buyers want to see functional and good looking kitchens in the properties they choose to view. If your kitchen is outdated, a minor kitchen remodel could help boost your home's value and overall appeal. Minor kitchen remodels can include replacing cabinets and countertops; replacing cabinet and drawer fronts; updating hardware; replacing appliances; installing a new sink and faucet; installing new flooring; and aesthetic changes like new paint and trim. The name of the game is minor changes - there's no need to take out walls or break your bank account. A simple kitchen refresh can catch the eye of many potential buyers, and at over 70% ROI, this is a great option for those sellers looking to make their home stand out.

Window Upgrades

Windows are an important part of any property, and if your home has old windows, it's possible they could be dissuading buyers from looking at your house. While windows can be an expensive update for those properties with tons of windows, they do have an excellent ROI (67.5%) and they come with a number of benefits: enhanced home security and safety, improved energy efficiency, noise reduction, and improved overall curb appeal. Windows can be a big decision when it comes to renovations, but they will absolutely appeal to buyers and help your home sell.

New Siding

Siding can really make or break a home, and for some buyers, homes with old, decayed, warped, or just odd siding can immediately make them skip a showing. Just like replacing windows, replacing siding isn't 'cheap' - it's an investment, especially for those with big homes. But new siding comes with a number of benefits: a high ROI (68.3% for fiber cement; 67.2% for vinyl), increased curb appeal, improved energy efficiency, and overall longevity (vinyl siding can last between 20-40 years, and fiber cement siding can last up to 50 years). New siding is a great selling point and highly marketable.

With real estate markets slowing down, for some owners it may feel like their home will never sell. Sometimes the homeowner needs to help the process. Upgrades can certainly help boost a home that's been sitting as well as help add to the resale value of the home. If you have questions on what you can do to help boost your property, contact me.

Prepping Your Yard for Fall

With the changing of the seasons and cooler temps right around the corner, now is a great time to prepare your yard for the fall and winter months. Even if you don't live in an area prone to cold or harsh climates, the tips below are useful for any person with a place to call home.

Fertilize Lawn

Like all living things, lawns need food all times of the year. Before it gets super cold out, apply fall lawn fertilizer to help prevent winter damage. Not sure what to get? Your local gardening center can help you find the perfect fertilizer for your climate zone and yard type.

Drain Garden Hose/Sprinkler System

Colder months can do a number on hoses and sprinkler systems if water freezes in them. Now's a great time to drain and store garden hoses. If your area is prone to freezing temps, drain any exterior pipes and install insulating covers on outdoor spigots.

Clean Gutters

Gutters can get full very quickly with leaves and other tree debris; they can also cause major issues if they freeze while full. Take the time to check your home's gutters and downspouts. Once all the leaves have fallen, clean the gutters out to avoid drainage issues in the winter months.

Plant Spring Bulbs

If you know you'd like some color in the spring, now is an excellent time to plant spring bulbs! Depending on your climate and plant hardiness zone, there's optimal planting times in the fall for spring bulbs. Plan and plant now so you can enjoy the fruits of spring in the new year.

Bring Plants Inside

If you live in an area prone to the cold, now is the time to bring those perennials inside that need protection from lower temps and bad weather. Take care as to do it gradually and early in the season so as to avoid shock and possibly losing your plants.

Check Windows and Doors for Leaks

Ensuring your home is energy efficient is important for any homeowner. Whether it's holding in the AC, or holding in the heat, now is the time to ensure your windows and doors are leak free. Re-caulk windows and exterior door trim, and install new weather stripping, door seals, or draft stoppers to your exterior doors to ensure your home remains nice and comfy.

The changing of the seasons is always a great time to go over home tasks and compile a list of anything that may need fixing or replacing in the future. Whether you're preparing your home's exterior or interior, tasks and maintenance are always guaranteed when it comes to homeownership. If you have questions on how to keep your property in tip-top shape, please reach out: kris@hutch4home.com! 

September is Childhood Cancer Awareness Month and HUTCH4HOME has gone full GOLD! Because we know that 30 days of awareness isn’t enough for the kids, we support this cause all year long. Here are a few of the ways we love to give back and support children and families through local events.

This month Joni Hutchinson is riding in the Great Cycle Challenge for cancer research. This is her 5th year taking the challenge to raise money for childhood cancer research. Thank you for donating and sharing my post about this! With your support, she doubled her fundraising goal! Thank you!

I am training to run the Des Moines IMT 1/2 Marathon for Team Children’s Cancer Connection. You can find out more about this event, sign up to run, or volunteer here… Team-CCC

Several of you may remember Ava through her love of the Children’s Cancer Connection. Here is her story from the Des Moines Register and a very special interview with Keith Murphy during RVTV 2017. The Children’s Cancer Connection shared this article about Childhood Cancer Awareness Month and the many ways to GO Gold if you are interested in learning more.

A few weeks ago, we sponsored the 6th annual Ava’s Birthday Blood Drive with Life Serve Blood Center. Ava chose this opportunity as one of her last wishes to give back to those in need. Here’s a fun fact about that day: They used special bags during the collection in order to harvest the platelets for cancer patients! Hosting a blood drive is a very rewarding experience! One donation can save up to 3 lives!!

Also in August, we collected wish list items and pop tabs for the Des Moines Ronald McDonald House. That little piece of metal really adds up. The Des Moines House notes they take in about $3000 from pop tabs. We stayed at the Rochester House for several months in 2009, which is where we started collecting. They make about $10000 to $15,000 per year. We also stayed for a short time in Atlanta and they note on their website that they have raised $156,944 since 1998 from POP TABS! Our next future goal is to host a meal at the DSM House. I will keep you posted in case you want to join us or learn more about the experience.

This year I became a Miracle Agent for RE/MAX. Through the Miracle Home program, I donate to give back and help ensure that every child in our community who needs care has a chance at the best care possible. This is a full circle experience for me since I made my first donation in 2007 before I could even imagine having a sick kid to the present day where I am giving back knowing all too well what impact the Miracle Network has on families like mine.

Other upcoming events this year include the Festival of Trees and Lights; this event supports Child Life services for children in the hospital. We love seeing all the creative talent that goes into this fundraiser. Another fun holiday event is Jolly Holiday Lights to support the Make a Wish foundation which is working hard at its vision of giving children renewed strength to fight their illnesses, bringing families closer together, and uniting entire communities. Early next year is St. Baldrick’s in Bondurant. We absolutely love this event and the talented organizers who work hard to put on and grow this event year after year. St. Baldrick’s is the largest non-government funder of childhood cancer research grants. Our team Ava’s Way a.k.a. Strength for Ava has taken part since 2008.

Thank you for all the support over the years! There are so many significant causes in the world to love and support, so we are grateful and honored that many of you have gone GOLD not just in September, but also throughout the year! If you are interested in learning more about these organizations or others that are not listed here, let me know. We are relentlessly passionate about giving back and being a light to those in need. 

Mistakes Buyers and Sellers Regret Making

Mistakes happen, even in real estate. Although it may be one of the biggest investments a person can make, both buyers and sellers can and do make mistakes. Take some time to learn from the mistakes of others so you can avoid them in your own real estate journey.

For Buyers

Picking the Wrong Location

For many buyers out there, buying a home or property can come with a lot of forgiveness. When a buyer is in love, they have the uncanny ability to forgive a property's perceived faults. Noise? Forgiven. Bad location? Forgiven. Not enough amenities? Forgiven. One of the most important and key rules to buying a home is ensuring the location is right. For some buyers, who may be up against a crazy market or have economic reasons for looking in a specific area, the luxury of finding the perfect home in the perfect location is not feasible. For others, especially those that are not in a rush to find a new home, they can take time to map out their prime location and wait for that perfect property to appear on the market. Don't fall victim to the mistake of not buying in the area you want to live in - it could end up costing you in the long run.

Buying Sight Unseen

The pandemic created a need for buyers to rely on virtual tours and listing photos to really get the feeling for a property. And while open houses and in-person viewings have now become the norm again, there are many buyers that are still opting to buy sight unseen, especially in crazy real estate markets. Some buyers have had no issues with only relying on photos and tours; others haven't been so lucky. The last thing you want is to end up with buyers remorse, living in a home you don't actually want.

Another issue that's become popular in areas with crazy markets is forgoing an inspection. As a buyer, you cannot depend on a seller to know all the issues with his/her property. Some cash buyers can afford to forego an inspection; others cannot. Mistakes happen, but you can 100% avoid buyers remorse by ensuring you actually visit the home you want to buy and make a point of having a proper inspection done. Even if it doesn't change the terms of your contract, you'll at least have an idea of what you're getting yourself into with your new home.

Living in an HOA

Communities with HOAs can vary greatly in terms of the reach the HOA has over community members. While living in a community with an HOA can be great for people that want structure within their neighborhood, for others it can be a nightmare. If you're the type of person that likes to control the color of your home's exterior, park your car on the street, or even likes to keep your garbage cans on the side of your house, you could end up making a big mistake by buying a home in an HOA community. If you have your eye on a specific neighborhood or community and you know it has an HOA, review all rules and regulations before you buy.

For Sellers

Not Putting Enough Effort Into the Sale

Regardless of whether you live in a hot market or not, buyers love seeing a home at its best. A home that's taken care of will undoubtedly have more interest and possibly more offers than one that isn't. For sellers, putting effort into the sale can be as simple as ensuring your home is tidy and clutter free. For some buyers, seeing a home at its worst could impact whether they lowball their offer. Buyers like to get excited, and a mistake to avoid is failing to give buyers reasons to be excited to see your home.

Not Planning for Taxes

For many markets across North America, property values have steadily increased over the past few years, and owners who have been in their homes for decades are seeing huge profits when they sell. While homes and other types of property are not generally subject to normal sales tax, if you see a large return on your sale you may be subject to other taxes like capital-gains taxes. Exemptions and reductions are available but rely on certain factors being met, so it's not a guarantee you'll be able to avoid tax on your sale. Don't make the mistake of assuming you won't have to pay taxes - it's best to get as much information as you can from a local expert as to whether you'll be subject to taxes before you sell so you can prepare accordingly.

Not Being Upfront About Issues

No one wants to admit their home has or had issues, but for sellers, disclosing issues you know about is required by law. If you hide issues or work that has been done, or feign ignorance of the issue, it could come back to bite you in the future. Most residential sales in the US require some form of disclosure document (the law is different in Canada and province-specific). Specifically in the US, if you do not disclose certain items in the sale, and the new owners can prove that you knew about them, they have the right to litigation. When it comes time to sell, be as forthright as possible and work with your agent to disclose all necessary items to prevent any possible negative outcomes.

Buying and selling real estate can be a big task, especially for new buyers. But real estate is not a new thing - whether a newbie or seasoned veteran, learn from the mistakes of others to prevent any heartbreak, buyers remorse, or loss of funds. If you're thinking of buying or selling, don't hesitate to reach out with questions or concerns, kris@hutch4home.com. You can also see what's available on the local real estate market by visiting my website: hutch4home.com. Spring is here, and the real estate market is ready to go!

Photo by Cristina Glebova on Unsplash

                                                                        
Photo by Levis Carroll on Unsplash

Another trick is if you want to plant some greenery to fill in and give a sense of curb appeal, try some greens. Lettuce, spinach, and other edible greens make lovely container gardens, and they like Iowa’s spring temperatures. The bonus is you get a yummy salad just in time to plant your summer annuals.

Photo by Cristina Glebova on Unsplash

Last, but not least, get that yard green! You know the saying; the grass is always greener on the other side of the fence? Well, don’t be down with brown. You can apply fertilizer anytime and ramp up what Mother Nature has already started. The best time to seed is in the fall, but early spring showers are a good time to do some overseeding and patching too.

Image by Photo by Max Ostwalt on Unsplash

The Hutchinson Real Estate Team a.k.a. Kris and Joni would love to help you get your home sale-ready and sold this spring! Call 515-210-3748 for a free market analysis. We cannot wait to hear from you!

Hutch@Home by Hutch4Home