Monday, August 18, 2014

What Can I Afford?

There is a rule of thumb that says that if you have the capacity to repay the mortgage, you can afford a single-family house that costs up to two and one-half times your annual gross income. (Annual gross income is the amount you make before taxes are deducted.) Like other rules of thumb, this is a general idea of how large a mortgage you can afford. But, because it is so simple, it doesn't take into account all the information that will help you feel comfortable with your mortgage payments.

If you are buying a house with someone else (spouse, parent, adult child, partner/companion, brother or sister or other relative), you should consider your co-purchaser's earnings and existing debts as well. Remember, if you apply for a loan with somebody else, you and your coborrower are both legally responsible for repayment of the mortgage.

Your buying power depends on how much you have available for the down payment and how much a financial institution will agree to lend you.

Your down payment
If you are a first-time home buyer, the price you can afford to pay for a house may well be limited by your ability to come up with the required down payment and closing costs. If you haven't accumulated much savings, you may want to set aside funds for a down payment on a regular basis from your paycheck. Monies in your checking and savings accounts, mutual funds, stocks and bonds, the cash value of your life insurance policy, and gifts from parents or other relatives may all be suitable sources for a down payment.

Private Mortgage Insurance

Depending on the lender and loan type, you may be able to get a mortgage with as little as 3 percent or 5 percent down. However, putting less than 20 percent down often means you will be required to purchase private mortgage insurance. Private Mortgage Insurance (PMI) helps protect the lending institution in case you fail to make payments on your mortgage.

Avoiding PMI
It is possible to get financing with 0-10% down and not pay PMI (Private Mortgage Insurance). This is why 80-10-10 financing was created. It is called 80-10-10 because a lender provides a traditional 80% first mortgage, a 10% second mortgage, and makes a cash down payment equal to 10% of the home’s purchase price. The same principle applies if the borrower can only afford to make a 5% down payment: 80-15-5 financing is also available.

Your closing costs
In addition to the down payment, you will also need to consider closing costs. The closing is the final step during which ownership of the house is transferred to you. The purpose of the closing is to make sure the property is ready and able to be transferred from the seller to you.

Closing costs generally range from 3 percent to 6 percent of the amount of the mortgage. So, if you were to buy a $100,000 house with a 5 percent ($5,000) down payment, you could expect to pay between $2,850 and $5,700 on your $95,000 mortgage. Sometimes, you can negotiate with the seller of a property to pay some of your closing costs, which will reduce the amount of money you will need to bring to closing.

How much a financial institution will lend you
Apart from having available funds for a down payment and closing costs, the other major factor limiting how expensive a house you can buy will be how much you can borrow.

When you apply for a mortgage, the lender will consider both your earnings and your existing debts in determining the size of your loan. Lenders generally use the following two qualifying guidelines to determine what size mortgage you are eligible for:

The amount of money you owe for mortgage payments, property taxes, insurance, and condominium or co-op fee, if applicable, should total no more than 28 percent of your monthly gross (before-tax) income. This is called the Housing Expense Ratio. The amount of money you owe for the above items plus other long-term debts should total no more than 36 percent of your monthly gross income. This is called the total Debt-to-Income Ratio.

Basically, lenders are saying that a household should spend no more than about one-fourth of its income (up to 28 percent) on housing and no more than about one-third of its income (up to 36 percent) on total indebtedness (housing plus other debts). Lenders feel that if they follow these guidelines, homeowners will be able to pay off their mortgages fairly comfortably.

These lender ratios are flexible guidelines. If you have a consistent record of paying rent that is very close in amount to your proposed monthly mortgage payments or if you make a large down payment, you may be able to use somewhat higher ratios. Some lenders offer special loans for low- and moderate-income home buyers that allow them to use as much as 33 percent of their gross monthly income for housing expenses and 38 percent for total debt.

Don’t Despair, There is a Loan For You
When you go to apply for a mortgage, the lender will use all the relevant data -- your income, your existing debts, the purchase price of the house, your down payment, the interest rate on the loan, and the cost of property taxes and insurance -- and calculate whether you qualify to borrow the amount of money you need to buy the house.

If you have a need for a real estate professional, please contact me. I would also appreciate your vote of confidence by passing my name to anyone you may know who would benefit from my services.



Thursday, August 14, 2014

Zillow’s going coast-to-coast shining the spotlight on some of the best agents in cities across the country

A few days ago, I received an email to the Zillow Pros blog. Much to my surprise, when I clicked the link, I found Zillow had done a feature on me! Wow!

Below is the blog, or you can also click here to see it on Zillow.

Top Real Estate Agent: Julie Wyss, San Jose, CA
DATE:AUGUST 12, 2014 | CATEGORY:REAL ESTATE PROS | AUTHOR:ALENA PILICHOWSKI

Zillow’s going coast-to-coast shining the spotlight on some of the best agents in cities across the country. These Zillow Premier Agents are successful in their community and have used Zillow to help grow their business.

Today’s San Jose, CA agent uses her entrepreneurial spirit and understanding of the unique Bay Area housing market to get the best deals for buyers, sellers and real estate investors alike. And, in return for their trust and business, she hosts biannual parties for her clients and vendors as a way to show her appreciation.


Introducing:

Name: Julie Wyss

Brokerage: Keller Williams Los Gatos Bay Area Estates

Years in business: 13

Years as a Zillow Premier Agent: 4

Favorite home style: Mediterranean

We asked Julie what makes her successful. Here’s what she had to say:

Zillow: Why are you successful as a real estate agent?
Julie: I have a team of very talented professionals providing the ultimate level of service and seamless support for every transaction. I earn client trust by demonstrating commitment and high values, communicating completely and clearly, and making transactions excitingly enjoyable. I am passionate about achieving the best possible price for both my buyers and my sellers.

Zillow: Who or what inspired you to work in real estate?
Julie: I’ve been an entrepreneur for many years, and I also worked in the mortgage business. I’m exceptionally driven and detail-oriented, understand the Bay Area housing market, and generally love helping people. All of these things led me to the real estate industry.

Zillow: What is the best part of your job?
Julie: I love working with both buyers and sellers in the Bay Area because each listing is a new challenge, and it’s always rewarding to help my clients get the best possible price for their property. The “residential matchmaking” process is exciting as well; helping buyers find a home that is just perfect for them. I also have a few real estate investors I work closely with. Finding them that next “diamond in the rough” is great fun!

Twice a year, I hold appreciation events to thank all of my clients and vendors. I thoroughly enjoy being able to hold parties in honor of all of these wonderful people.

Zillow: What are three pieces of advice you have for success on Zillow?
Julie:

1. Follow up with all valid leads.
2. Be sure to get reviews.
3. Contribute to the Zillow platform to boost your visibility by boosting theirs.[Julie Wyss picnic]Hosting appreciation events for her clients is one of Julie Wyss’ favorite parts of her job as a real estate agent.

Zillow: What real estate time-saving tips do you have?
Julie: Find capable, talented people to be a part of your team. Let them manage certain aspects of transactions (marketing, project and document management, etc.) so you, as the agent, can focus on bringing in new business.

Zillow: How do you manage your to-do list?
Julie: I use Evernote to keep track of individual listings and I use checklists for both buyer and seller transactions.

Zillow: When you’re not selling real estate, what do you enjoy in your free time?
Julie: I enjoy hiking, mountain biking, and generally staying fit. I also enjoy great restaurants, wine tasting, traveling, and spending time with my family and friends. Most of all, I love having a happy home life with my husband and three children.

Zillow: How do you stay active in the local community?
Julie: I stay active in the local community by participating in local trail running events, supporting local schools, and hosting music festivals.

To learn from top agents, be sure to attend one of the free Zillow Agent Events, coming to a city near you. Know someone who deserves to be in the spotlight? Tweet @ZillowForPros with your nomination. View past pros featured in the Agent Spotlight here.

If you have a need for a real estate professional, please contact me. I would also appreciate your vote of confidence by passing my name to anyone you may know who would benefit from my services.


                                       
                 408.687.2026 |  Julie@JulieWyss.com | www.JulieWyss.com

Monday, August 4, 2014

What Happens When You List Your Home

What Happens When You List Your Home  

If you list your home with me, be assured that, a high priority of mine, is keeping you informed of all interest and market activity. Whether by phone, by e-mail, or by written notification, I will report regularly to you and keep you apprised of all relevant information including:
  • Broker feedback from broker tours and open houses
  • Client feedback from showing appointments including broker feedback
  • Advertising notifications
  • Any new market data or trends affecting the sale of your home
  • Review of your home’s marketing activities
  • Suggested adjustments to your marketing plan or pricing strategy

If you are interested in selling your property but have not listed yet, it would be my pleasure to show you all the ways in which I can effectively market your property through a Listing Presentation.

If you have a need for a real estate professional, please contact me. I would also appreciate your vote of confidence by passing my name to anyone you may know who would benefit from my services.