Conventional loans. FHA loans. VA loans. When buying a home, these phrases have probably come up in conversation once or twice. One of the perks our military members receive is the ability to purchase a property with a VA loan. But what does that mean for a San Antonio home buyer? For one thing, no money down. But, there are stipulations involved.

What is a VA Loan?

One of the things that sets a VA loan apart from others is that the Department of Veterans Affairs guarantees these loans for qualified individuals. Even so, they don't actually approve mortgage loans. You must still go through a private lender. But, with the VA guaranteeing it, you can purchase a property for no money down. This helps our cash-strapped military men and women become homeowners without having to come up with a huge chunk of change up front. Also, lenders tend to provide VA loans at lower rates than traditional financing.

Who's Eligible for a VA Loan?

First of all, you or your spouse must currently serve or have previously served in any branch of the military, including the National Guard and reserves. Active-duty members qualify after six months of continuous service. National Guard and reservists qualify after six years. However, if you are called to active duty before your six years are up, you qualify after 181 days of service. Anyone who served active duty for at least 90 consecutive days during times of war qualifies for a VA loan. During peacetime, you qualify after 181 active days of service. Spouses of those who died during service or as a result of their service also become eligible for a VA loan.

How Do I Qualify?

First, you must receive a Certificate of Eligibility (COE). Active members can request one from the lender. Or visit VA.gov, sign in to your account, and find out which forms you need. If you'd prefer, download a COE form here, fill it out and mail it in. Make sure you include your proof of eligibility with your completed application. After you receive your COE, take it to your lender. Then, proceed with the mortgage loan process. The bank will check your income to make sure you qualify financially for the loan. The VA guarantees home loans up to $484,250. But you still must qualify with the bank in order to receive approval.

If you have any questions about VA loans, talk to your lender. Not all lenders offer VA loans. Terms vary from lender to lender. So, make sure you spend the time to shop around.

LUX Move Up* by Christine Aldrete Banks, CRS, SRS, RSPS
www.StoneOakLiving.com
830-279-8678

When you work a normal 9-to-5 job and receive a regular weekly/bi-weekly/monthly paycheck from your employer, it's easy to determine your income. But self-employed individuals don't get paid the same. And lenders want to see proof of income when deciding whether or not to approve you for a mortgage on a San Antonio home. Self-employed home buyers might benefit from knowing exactly what a bank looks at when determining your income qualifications.

What Lenders Want to See from Self-Employed Home Buyers

Just like any other applicant, banks want to see a two-year income history. While other buyers may present banks with their W-2's, it's not that simple for self-employed home buyers. For one thing, instead of W-2's, self-employed business people receive 1099's from their clients. Lenders will want to see at least the last two years of tax returns to prove your income. You need to sign a 4506-T form as well. This allows the lender to request a copy of the last two years of returns directly from the IRS. When they receive those, they'll compare what the IRS sends them to what you present to them. Any discrepancies could nullify your loan request.

In addition to your tax returns, the bank wants to see a year-to-date profit and loss statement (P&L). They use all of this information together to determine your qualifying income. After they add up the two years of stated income on your tax returns and combine it with the year-to-date P&L, the average becomes your qualifying income for the purposes of your new loan.

Income Stability

Lenders understand that self-employed home buyers may not receive a regular income like other buyers. But, they do want to see some kind of stable income. If you made $85,000 two years ago and increased that to $95,000 last year, that indicates a steady growth as far as the lender is concerned. However, if you made $95,000 two years ago and show just $85,000 for last year, that throws up a red flag to the lender that your business may not be doing so well. If your current P&L statement continues that downward trend, your loan approval might be in jeopardy.

In the end, the lender makes a judgment call about your creditworthiness and financial stability. If you're unsure whether you'd qualify for a mortgage under your current financial situation, it doesn't hurt to talk to a lender before you start looking at new San Antonio homes. It's better to know where you stand before you find a home that you fall in love with. After all, you don't want to run up against any issues that might slow down the home buying process.

LUX Move Up* by Christine Aldrete Banks, CRS, SRS, RSPS
www.StoneOakLiving.com
830-279-8678

Spring is a time for renewal. The weather begins to ease up. Birds start chirping again. Leaves begin to sprout on the trees. It's the perfect time to do a bit of spring cleaning. Dust off the winter doldrums and breathe new life into your San Antonio home. While some things seem obvious for your spring cleaning ritual (bye-bye ill-fitting clothes you never wear), others might not appear to be as obvious. Here are a few things you really should concentrate on when performing your spring cleaning tasks.

Spring Cleaning Your San Antonio Home

Inside Your San Antonio Home

Of course, a good deep cleaning should be a top priority. That means getting behind the refrigerator to vacuum out the coils. Move the fridge to clean underneath it as well. Run a rag over your dusty ceiling fans. Scrub the windows until they shine. Remove everything from your cupboards, refrigerator, and freezer. Get rid of all expired food. Then wipe down the inside of each before returning the "good" food back inside. Go through all of your closets (including linen closets). Make a pile of the clothing and linens you never use anymore. If they're in good condition, consider donating them. Same goes for the old toys your children don't play with anymore.

Now would be the opportune time to change out your air conditioner filters, too. As the weather begins to warm up, you'll be using your air conditioner more and more. During heavy usage periods, replace your filters once a month. This keeps the air conditioner running efficiently. Make sure to wipe down the vents, too. While you're at it, replace the batteries on your smoke and carbon monoxide detectors. Check any fire extinguishers you have in the house to make sure they haven't expired yet as well.

Outside Your San Antonio Home

Your lawn just experienced a long winter's nap. Time to wake it up. Fertilize it well. If you see patchy spots, add a turf builder to those areas. Make sure you clear the area of any dead leaves and weeds first. Your local gardening center should be able to answer any questions you may have and offer advice on the best products to use.

Give the outside of your home a good power washing. That includes the siding, sidewalks, and driveway. Clean off your patio furniture so it's ready to use when you start those backyard barbecues. And, speaking of barbecuing, time to scrub the grill. Just heat it up for a few minutes to loosen up anything stuck to it. Let it cool off before tackling the grate, drip tray or burners.

Miscellaneous Spring Cleaning Tasks

Now, once you deep clean your property, it's time to clear out the other items that might be cluttering up your life. Like that Netflix or Hulu membership. Do you use it enough to justify the expense? If not, get rid of it. Still having magazines delivered to your door that you never seem to find the time to read? Cancel your subscription. Same thing goes for any other monthly subscriptions you never use.

Next, go through your bills. Read each utility, cell phone, and credit card bill carefully. You'd be surprised at how often companies overcharge you without you knowing. See if you can get a better rate. Many utility companies offer lower rates when you bundle services (phone, internet, and cable). Same goes for your insurance company. See if you can combine your car insurance and homeowners or renters insurance under one company to save a few bucks.

Finally, conduct a home energy audit. CPS Energy offers a free energy assessment for all of their customers, whether you own or rent your San Antonio home. Or you can conduct an audit yourself. Look for air leaks around your windows and doors. Check the insulation in the attic. Make sure appliances are well ventilated. Energy.gov provides an excellent energy audit checklist for anyone interested in going the DIY route.

Make spring cleaning your San Antonio home a priority. Take your time. Tackle one task before you go on to another so you don't feel overwhelmed. You might even discover a problem in its early stages, which could save you thousands of dollars in the long run. Good luck.

LUX Move Up* by Christine Aldrete Banks, CRS, SRS, RSPS
www.StoneOakLiving.com
830-279-8678

A couple of weeks ago, I wrote about how to negotiate a low ball offer. One of the suggestions made was for sellers to provide an incentive, such as paying points. But, you don't have to wait for the seller to offer this up to you when buying a home. If buyers want to make it a little easier to pay for the Stone Oak lifestyle, they can pay points as well. What exactly does that mean and how does paying mortgage points a Stone Oak home buyer? You'll have to read on to find out.

What are Mortgage Points?

Mortgage points (aka "paying points" or "discount points") are fees paid up front to lower your interest rate. Typically, you pay 1% of your loan amount for a 1/4% discount on your interest rate. For example, let's say you borrow $300,000 for your new San Antonio home. You receive an interest rate of 4.5%. That puts your mortgage payment at $1520 per month. If you pay $3,000 for a one point reduction, your rate drops to 4.25% and you pay $1476 per month. Want to go even lower? Pay $6000 for two points. Your interest rate falls to 4% and you pay $1432 per month.

Now, you need to keep in mind that the actual amount for mortgage points does vary from lender to lender and depends on the marketplace. You may even receive a tax benefit from paying mortgage points. Consult your tax specialist first. If you take out an adjustable rate mortgage, the reduced interest rate usually only applies to the initial fixed-rate part of the loan (1, 3, 5, 7 or 10 years).

Should I Pay Down My Interest Rate or Increase My Down Payment?

That depends. When you pay less than 20% down, you must pay PMI (Private Mortage Insurance). That costs anywhere between 0.5% and 1% of your loan amount each year. On a $300,000 mortgage, that runs between $1500 and $3000 per year or $125 to $250 per month. If you pay $3000 to reduce your interest rate by 1/4%, you'll need 68 months (just over 5 years and 8 months) to break even. If you don't plan on staying in your San Antonio home that long or want to utilize an adjustable rate mortgage to purchase your property, the mortgage points might not be worth it. Instead, you should put that money into your down payment. Run the numbers to decide which course of action works best for you. If you have any questions, contact your San Antonio REALTOR® or talk to your lender.

LUX Move Up* by Christine Aldrete Banks, CRS, SRS, RSPS
www.StoneOakLiving.com
830-279-8678

So, the Stone Oak lifestyle is calling your name. You want to settle in this part of north-central San Antonio because of the great schools, safe neighborhoods, and amazing amenities. Who could blame you? Searching for a house comes with certain expectations as far as how you conduct yourself as a home buyer. Keep these unwritten "rules" in mind when you go through the home buying process so as not to offend your agent or a seller and lose your chances of owning your dream home.

How to Be a Conscientious Stone Oak Home Buyer

Sign a Buyer-Broker Contract Before Looking at San Antonio Homes

Finding a REALTOR® you feel comfortable with should be one of your first priorities as a home buyer. They know the area and can help you narrow your focus to only those properties that fit your "must have" list. Once you sign a contract with a specific agent, then you can ask them to show you San Antonio homes for sale. They only get paid for their time when a sale is complete. A contract defines the buyer-broker relationship. Since you can only work with one contracted agent at a time, asking another agent to show you homes is rude to your current agent and unfair to the other agent. If you find that your agent is difficult to get a hold of or you're unhappy with their services, you can always void the contract and find someone else.

Always Contact Your Agent First

Many home buyers turn to the internet to search available houses for sale in the San Antonio real estate market. But, if you see one you like online and wish to see it in person, contact your real estate agent, not the listing agent. This way, your agent can contact the seller's agent. In turn, they contact the seller to make arrangements for a showing. Why go through this communication chain? The listing agent represents the seller. They have their client's best interests in mind, not yours. That doesn't mean that they want to take advantage of you. But, it helps to have someone on your side to represent your best interests, especially when it comes time to negotiate.

Tardiness is NOT a Virtue

When you make an appointment with your REALTOR®, be on time. They may have other showings set up for the day. Your tardiness could create a scheduling problem for those other showings later in the day. It also shows a disrespect towards your agent. If you're running late or need to reschedule, contact your agent right away to let them know.

Get Your Financing Straight Before You Submit an Offer

Every home buyer should make sure their finances are in order before they even start looking at Stone Oak homes. Many agents won't submit an offer without a mortgage pre-approval letter accompanying it. This shows the seller how serious you are about buying their house. Since it can take a little while to go through the pre-approval process, contact your mortgage company as early on in the home buying process as possible so that you're ready to pounce when you find a San Antonio home you love.

Just Looking? Say So.

Finally, a home buyer needs to be honest if they're in the "just looking" phase. Going to open houses or making your way through a Parade of Homes event is perfectly acceptable. This helps you get a better picture of what you really want in your next home. But, don't pretend to be a serious home buyer if you aren't ready to be one yet. Enlisting the help of a real estate agent without letting them know you're just looking could take their time and focus away from a serious buyer. Since they only get paid when a sale is completed, this means taking money out of their pocket. And you wouldn't be happy if someone did that to you, would you?

LUX Move Up* by Christine Aldrete Banks, CRS, SRS, RSPS
www.StoneOakLiving.com
830-279-8678

Several buyers looked at your San Antonio home. Many people want to live that Stone Oak lifestyle. Finally, one decided to put in an offer on your property. Unfortunately, they offered much lower than your list price. Don't let emotions get the better of you. Think of this as the opening lob in your real estate tennis match. Get your head straight by pushing any hurt feelings aside and then start negotiating that low ball offer into one you and the buyer can both be happy about.

Negotiating a Low Ball Offer

Present a Counteroffer

Instead of saying "how dare you!", counter with "how about ($)?". You know you priced your home appropriately for the current San Antonio market. Counter back with a slightly lower number if you feel comfortable with that. Or, if you're confident that the list price is the right price, you could counter back with it. The choice is ultimately up to you. But consult your real estate agent first to find out what they think would be in your best interest.

Set an Expiration Date

One way to show the buyer that you mean business is to add an expiration date to your counter on their low ball offer. For example, you expect an answer within 24 to 48 hours or the counter comes off the table. This may prevent several "back-and-forth" counters between the buyer and seller.

Throw in Incentives

One way to bring the low ball offer up is to provide incentives. Throw in a prepaid home warranty for a year. Or offer to pay the first year of HOA dues. Pay points (reduces the interest rate) or a portion of the closing costs. This especially appeals to first-time homeowners or buyers strapped for cash. You may even want to throw in the brand new washer and dryer you recently bought or landscaping services for a year in exchange for a sale price closer to asking. Find what the buyer is most interested in and use it as an incentive for them to increase their offer.

Say No Thanks

If nothing else works or feels right to you, you can always say "no thanks" to that low ball offer. Don't counter. Don't offer incentives. Simply say no. This tends to be risky, but might it might result in the buyer coming back with a much better offer. Each scenario is different, though. So, definitely discuss this with your real estate agent before cutting a potential buyer off like that.

LUX Move Up* by Christine Aldrete Banks, CRS, SRS, RSPS
www.StoneOakLiving.com
830-279-8678

You desire the Stone Oak lifestyle. Who can blame you? It's an amazing place to live. In order to be approved for a mortgage loan, you must have a decent credit score. Notice, I didn't say excellent. But, the better your score, the better your interest rate. Even if a new San Antonio home purchase is months away, avoid these credit mistakes so that you don't hurt your chances for loan approval.

Credit Mistakes San Antonio Home Buyers Need to Avoid

Ignoring Your Credit Report

First of all, you need to know your credit score. Banks use this number to help determine whether or not to approve you as well as what interest rate to charge. Your creditors report activity (good and bad) on your account to three reporting agencies: Experian, Equifax, and TransUnion. Some creditors may only report to one or two agencies and not all three. That's why your score may fluctuate.

Past studies found that one in five people reported errors on their credit report. Therefore, it works in your favor to request a free copy of your report from each of the agencies as soon as possible. Check each report for errors. Submit a correction request to the agency with the error reported on it. (You'll need to provide proof to back up your claim.) Then, contact the creditor sending the erroneous error, explain the problem, and ask them to request that the incorrect info is taken off the agency's record.

Late Payments

It happens. Work. Kids. Extra-curricular activities. Sometimes, we miss a due date somewhere. That negatively impacts your credit score. Avoid further credit mistakes by paying your bills on time...all of them. Even utility companies may submit your late payment information to the reporting agencies.

Shopping Up a Storm

It's easy to get excited about a new San Antonio home purchase. You might want to buy a new washer and dryer. Or, you want to get rid of the old furniture and start with all new stuff in the new house. Stop. That's another one of the credit mistakes home buyers make. Driving up the balances on your credit cards hurts your credit score. So does opening up a bunch of new lines of credit. Instead, focus on increasing your down payment savings or paying down your current debt.

Closing Old Credit Accounts

On the flip side, closing old credit accounts harms your credit as well. Yes, I just said paying down debt was great. But, when you close an old account, it lessens your balance-to-limit ratio. Banks also look at this to see whether you're using your credit responsibly. Ideally, they want to see this at 30%. For example, you have three cards with a combined limit of $3000. You carry a $750 balance between two of those three cards. That's a 25% balance-to-limit ratio. The card that's paid off has a $1500 limit. If you cancel that card, your balance-to-limit ratio increases to 50% ($1500 total credit limit between the remaining two cards divided by the $750 balance). That drops your credit score. Also, banks like to see "seasoned" credit. This refers to credit that you've had for a while and used responsibly. Keep those $0 balance accounts active. If you do use them, pay off the balance each month.

Co-Sign

Finally, don't co-sign a loan. It's wonderful that you want to help your friend or family member. But, if they default on the loan, it becomes your responsibility. Also, the late/missed payments show up on your credit report. That loan balance may also affect your debt-to-income ratio, since it gets lumped into your debt load.

Avoid these credit mistakes whenever possible. This is especially true in the months leading up to a new San Antonio home purchase. Then, the road to homeownership should ride much smoother. Contact me when you're ready to start looking for your next Stone Oak home.

LUX Move Up* by Christine Aldrete Banks, CRS, SRS, RSPS
www.StoneOakLiving.com
830-279-8678

After looking at what feels like hundreds of Stone Oak homes, you finally found "the one". Once negotiations finished, you and the seller agreed upon a fair sale price. You need to take out a mortgage to pay for your happy piece of the Stone Oak lifestyle. As part of the loan process, the mortgage company requires that a home appraisal be performed. Why do they need the appraisal and what effect does it have on your mortgage loan?

Why Does Your Bank Require a Home Appraisal?

You might think of a real estate transaction as a business deal between the buyer and the seller. But, the lender is also an investor in the property...at least until the buyer finishes paying off the loan. As such, they have a vested interest in making sure that the property in question is worth the purchase price. If you (the buyer) defaults on your loan, they are the ones that will reclaim the property and have to sell it off to recoup their costs. Therefore, they aren't willing to lend the buyer more than the property is currently worth. That would be a bad investment. Thus, a home appraisal is required.

Who Pays for the Home Appraisal?

The lender hires the home appraiser and pays them initially. But the buyer reimburses them the cost of the appraisal fee (typically $300-$400) as part of the closing costs. Technically, the appraiser works for the mortgage company as an unbiased third party. Neither the buyer nor the seller is allowed to be on the property when the appraiser does their job. That helps keep both the appraiser and the home appraisal as honest as possible. The buyer will receive a copy of the appraisal once it's completed.

What if the Home Appraisal Comes Under the Agreed Upon Sale Price?

When this happens, the buyer has four options. First, you could pay for another appraisal out of pocket. However, you run the risk of it saying the same thing as the first appraisal. Secondly, you could ask the seller to lower the sale price to match the appraisal. As you can imagine, that's not an option that sellers like. Thirdly, you bring cash to the table to cover the difference. For some buyers, most of their cash tends to be wrapped up in the down payment, home inspection, and closing costs. Coming up with thousands of dollars extra could prove difficult. Finally, you could walk away from the deal altogether. As long as you have a home appraisal contingency in your sales contract, you'll even receive your earnest money back. While this may feel like a crushing blow at first, keep in mind that it actually saves you from paying more for a property than it's worth. And that's money in the bank.

LUX Move Up* by Christine Aldrete Banks, CRS, SRS, RSPS
www.StoneOakLiving.com
830-279-8678

The Department of Health & Human Services recommends that adults get anywhere between 75 minutes (for vigorous aerobic activity) and 150 minutes (for moderate aerobic activity) of exercise each week. That breaks down to 15 to 30 minutes per day, five days a week. Walking provides great aerobic activity and you don't need any special equipment or a gym membership to do it. To promote community involvement as well as a healthy lifestyle, the City created the San Antonio City Manager's 5K Walk/Run. Now in its 11th year, the CM5K has become a bigger hit than ever with the locals.

What: San Antonio City Manager's 5K Walk/Run 2019
Where: Roosevelt Park (331 Roosevelt Ave)
When: Sunday, March 31st, 8 am
Cost: $0-$35
Contact: City Manager's Facebook Event Page

San Antonio City Manager's 5K Walk/Run 2019

All ages are welcome to join the San Antonio City Manager's 5K Walk/Run 2019. Of course, anyone under 18 years old will need an adult accompanying them. In years past, the 5K took participants around Breckenridge Park and Sea World San Antonio. This year, the event route takes everyone through several historic downtown areas (Arsenal, Lavaca, King William, and Southtown).

Like the name suggests, you can choose to either run or walk the 5K (3.1 miles) route. You might even choose to do both at some point. Add a hop, skip and a jump if you want. The whole point of this event is to get out into the open air and get active. How you decide to get to the finish line is totally up to you. While this isn't technically a race, prizes will be awarded to the top finishers in several age categories as well as the top male and female finishers overall. That might be motivation to get your groove moving a little faster.

Ticket Information for the 5K Walk/Run

All City employees (both current and retired) can participate absolutely free of charge. If they bring friends and family with them, it's just $7 per person to participate. All other community members pay just $15 if they register before 17th. After that, fees go up. If you register between March 18th and March 30th, you'll have to pay $25 per person. But, if you're a true procrastinator, you can still sign up on the day of the event at Roosevelt Park. Unfortunately, since you waited so long, you'll be paying $35 per person to participate then. If you really want to be a part of the San Antonio City Manager's 5K Walk/Run 2019, I suggest you sign up right away and save yourself some money.

Volunteers Needed

Interested in volunteering for the San Antonio City Manager's 5K Walk/Run 2019? Organizers could use the help. This is a big undertaking. All you need to do is call IAAP at (210) 558-7828. Good luck and have fun!

LUX Move Up* by Christine Aldrete Banks, CRS, SRS, RSPS
www.StoneOakLiving.com
830-279-8678

Have you been waiting to take the plunge into homeownership? Scared by higher prices and talk of rising interest rates? Worry no more. While real estate experts agree that prices will continue to rise this year, other factors may offset that to make buying a Stone Oak home in 2019 a good idea.

Why Buy a Stone Oak Home in 2019?

Inventory

For years, low inventory spurred on competition among home buyers. But, builders heeded the call for more Stone Oak homes. New construction has happened at a frenetic pace over the last couple of years, especially at higher price points. First-time homebuyers and those looking for "entry-level" homes might still have a tough time finding a property. Even so, inventory levels in that price point are expected to remain level rather than falling off like in years past.

Prices

No, Stone Oak home prices aren't expected to fall. On the other hand, they're not expected to continue their outrageous rise either. In 2018, the median sale price rose by almost 5%. In 2019, experts predict a 2.2% rise instead. So, yes, Stone Oak home buyers pay more...just not at the rapid increase we saw last year. Therefore, if you really want to own a home this year, the sooner you put that process in the works, the better.

Interest Rates

The Federal Reserve raised its benchmark rates four times last year. But they held off in December 2018. They also announced that they'd stave off further interest rate increases for the time being. This reverses their claims last year of continuing to raise rates well into 2019. While rates briefly rose above 5% last year, they've steadily decreased for several weeks. Currently, Bankrate.com reports interest rates for a 30-year fixed-rate mortgage run around 4.57%. That's still much more affordable than even the 6% rates we experienced 10 years ago. If you've been waiting for rates to go back down to the low to mid-3% range we saw in 2015/2016, that probably won't happen. So, if you want to own a Stone Oak home, you need to start looking now.

Rent

Finally, like sale prices, rents continue to rise. In fact, they're outpacing prices in terms of trajectory (they're going up faster than sale prices). With homeownership comes great responsibility. But benefits abound as well. Building equity. Tax credits. Pride of ownership. No longer will you be paying someone else's mortgage. Now, this property belongs to you.

When you're ready to start looking for a Stone Oak home to call your own, contact me.

LUX Move Up* by Christine Aldrete Banks, CRS, SRS, RSPS
www.StoneOakLiving.com
830-279-8678