Andrea Hamacher, REALTOR® DRE: 01858698
Search for properties:
Address
2024 5 Star Real Estate Professional Award
Top 10% of Agents in San Diego - 2023
2023 Coldwell Banker Int'l Sterling Society - Top 11% Worldwide
CA DRE: 01858698
FEATURED LISTINGS
- 1/46 46
Active$395,000
2 Beds2 Baths1,248 SqFt1175 La Moree RD #26, San Marcos, CA 92078
Manufactured Home
Listed by Andrea Hamacher of Coldwell Banker West
- 3D
Open Sat 12PM-3PM$995,000
4 Beds3 Baths1,836 SqFt7821 Mission Bonita Dr, San Diego, CA 92120
Townhouse
Listed by Christine D Isidro-Pallesco of Countywide R.E.& Property Mgmt
- 1/35 35
Open Sat 11AM-3PM$935,000
4 Beds3 Baths1,885 SqFt1312 Carneros Valley St, Chula Vista, CA 91913
Single Family Home
Listed by Annel De Vargas of Coldwell Banker West
- 1/35 35
Open Sat 12PM-4PM$1,499,000
3 Beds3 Baths1,499 SqFt3876 Belmont DR, San Diego, CA 92116
Single Family Home
Listed by Dave Dennis of Coldwell Banker West
- 1/42 42
Open Fri 3PM-6PM$769,000
3 Beds1 Bath1,198 SqFt220 Beech, Chula Vista, CA 91910
Single Family Home
Listed by Claudia Medina of Coldwell Banker West
- 1/54 54
Open Fri 2PM-6PM$1,199,000
5 Beds4 Baths2,909 SqFt1223 Sundrop CT, Chula Vista, CA 91911
Single Family Home
Listed by Don Vandover of Coldwell Banker West
- 1/31 31
Open Sat 11AM-3PM$1,100,000
4 Beds2 Baths2,293 SqFt1786 Wind River Road, El Cajon, CA 92019
Single Family Home
Listed by Monica Reyes of Coldwell Banker West
- 1/23 23
Open Sat 1PM-4PM$685,000
2 Beds2 Baths1,028 SqFt3502 Pringle ST #202, San Diego, CA 92110
Condo
Listed by Tim Ditzel of Coldwell Banker West
RECENTLY SOLD
closed
$774,443
3.6%$802,319
4 Beds4 Baths1,751 SqFt329 Liberty WAY, Oceanside, CA 92057
Townhouse
Listed by Nicole Mascola of KB Home Sales - So Cal, inc.
- 1/44 44
closed
$1,495,000
2.0%$1,465,000
4 Beds3 Baths3,447 SqFt2656 Morning Terrace, Escondido, CA 92027
Single Family Home
Listed by Andrea Hamacher of Coldwell Banker West
- 1/36 36
closed
$999,000
0.1%$1,000,000
3 Beds3 Baths1,554 SqFt16016 Caminito de Linda, San Diego, CA 92128
Condo
Listed by Andrea Hamacher of Coldwell Banker West
Get Your Home Valuation for FREE
Find out what your home is really worth in today's market.
CUSTOMER REVIEWS click here for more
Stacey Cranert
Andrea was amazing! She really helped make this process easier for us and we could not be happier with her as our realtor. Highly recommend!
- Homes for Sale Escondido
- Homes for Sale Encinitas
- Homes for Sale in Carlsbad
- Homes for Sale in Oceanside
- Homes for Sale in Rancho Bernardo
- Homes for Sale in Poway
- Homes for Sale in San Marcos
- Homes for Sale in Rancho Santa Fe
- Homes for Sale in Del Mar
- Homes for Sale in La Jolla
- Homes for Sale in Pacific Beach
- Homes for Sale in Vista
MY BLOG: Real Estate News & Advice
Stage to Sell: 7 Proven Steps to Attract Buyers and Boost Offers
Stage to Sell: 7 Proven Steps to Attract Buyers and Boost Offers
Selling your home quickly and at the right price takes more than just listing it online. To draw in potential buyers and secure top offers, your home needs to stand out. That’s where home staging comes in. By strategically preparing your home—through redecorating, repairing, and making it look its best—you can make a lasting impression and significantly increase its appeal. The numbers speak for themselves: according to the National Association of Realtors, 81% of buyers’ agents report that staging makes it easier for potential buyers to envision themselves living in a home. Moreover, 44% of buyers’ and sellers’ agents say that staging can increase a home’s sales price, and 48% of sellers' agents agree it shortens the time a house spends on the market.1 You can choose to stage your home yourself with advice from your real estate agent or work with a professional stager. Whichever route you take, here are seven essential strategies to transform your home into a buyer’s dream. Step #1: Declutter and Depersonalize The first step in staging is to declutter and depersonalize your home. A recent survey of real estate agents found that this simple step can increase your home’s sale price by 3-5%.2 Ideally, you want to create a clean, neutral canvas where potential buyers can imagine their own lives. Remember that staging isn’t interior design—the goal isn’t to add personal, homey touches but to take them away.3 While you may love having plenty of comfy furniture, family photos, and unique knick-knacks, these items can distract potential sellers and make your home feel smaller.4 Be especially mindful to remove children’s toys and pet items. The task can feel overwhelming, but consider it a head start on packing for your move — and an opportunity to clear out things you no longer need. If you have a lot of belongings, renting a storage unit might be a smart way to keep things tidy while your home is on the market. Step # 2: Deep Clean and Repair A sparkling clean home leaves a fantastic first impression. Deep clean every room, paying special attention to areas that are often overlooked, like baseboards, windows, and appliances. Even minor smudges, scrapes, or signs of pet hair can put off some buyers. Your goal? Make it look like no one has ever lived there!5 Minor repairs are equally important. Fix slight imperfections like chipped paint, regrouting tiles, and replacing worn hardware. These easy cosmetic updates make a big difference in how buyers perceive your home’s value. For example, refinishing hardwood floors can offer a 147% return on investment.6 Need help getting your home spic-and-span? Let me recommend a professional who can help. Step #3: Pick Up a Paintbrush While buyers may repaint after they move in, the color and condition of your walls still have a big impact on their impression of the home as a whole. Neutral tones like beiges and off-whites appeal to the widest range of buyers—and to the friends and relatives who are also weighing on purchasing decisions.7 If your home features bold colors or striking wallpaper, consider a repaint before you list. When choosing paint colors, make sure to think about how they’ll appear in listing photos and videos. Light, neutral shades can make rooms look brighter and more spacious. Repainting is especially important in high-traffic areas like the kitchen. Painting outdated cabinets in white or a soft gray can also modernize your space.8 Step #4: Enhance Curb Appeal First impressions matter, and your home's exterior is the first thing buyers will see. That’s why 98% of agents believe that curb appeal is crucial to attracting a buyer.9 Boost your home’s curb appeal by power-washing the exterior and touching up your deck’s varnish.5 You might also consider repainting your front door. Research shows that a freshly painted front door in a classic shade like black or terracotta can increase offers by thousands of dollars.10 And don’t forget landscaping! Keep your lawn tidy, remove dead or dying plants, and consider adding seasonal flowers. Even standard lawn service can lead to a 217% return on investment.9 If you need assistance, I'm happy to offer a referral to landscapers in our area. Step #5: Stage Key Rooms When staging, concentrate on the rooms that matter most to buyers: the living room, primary bedroom, and kitchen. These spaces have the greatest influence on a buyer’s decision.1 If you’re working with a professional stager, they may bring in furniture and decor.3 If not, make the most of what you have, and don’t worry about how you’d arrange furniture in real life. This is just about showing off the space. Arrange furniture to create an open, inviting flow.5 Use large rugs to make rooms appear bigger and ensure artwork complements rather than overwhelms the space.7 Add pops of color with fresh flowers or simple decor like pillows to bring warmth without personalizing the space too much. Step #6: Put Your Home in Its Best Light Lighting is key to creating a welcoming atmosphere in your home. Natural light in particular makes any room feel more airy and spacious, so it’s essential to make the most of it. First, remove heavy curtains or blinds — if a room feels bare without a window treatment, hang sheer curtains or light-filtering shades to invite the outdoors in. Next, take a look at the landscaping surrounding your home. If overgrown hedges or trees block windows, especially on the ground floor, consider cutting them back or removing them entirely to let in the sunshine. Of course, homes need more than just natural light — and it’s important to use a combination of types of lighting to suit different uses and moods. Experts recommend that each room have three light sources: ambient lighting (think ceiling lights or chandeliers), task lighting (like lamps or under-cabinet lights), and accent lights (like track lighting and picture lights).11 If needed, replace outdated fixtures with more modern options.12 Even swapping out lightbulbs can make a difference—opt for warm, 2700k bulbs to create an inviting glow.7 Have hard-to-reach windows or need help installing new lighting fixtures? I'm happy to refer a professional who can help. Step #7: Show Off Your Work with Photography These days, most buyers will first see your home online, making high-quality photos essential. According to the National Association of Realtors, 89% of agents agree that professional photos are critical to marketing a listing.1 Here in our San Diego market, my standard service includes professional photography and a virtual tour, and often drone and video footage, and even virtual staging, where photo editors swap out furniture and colors to show how your home would look with different decor. Talk to your agent about what makes sense for your situation, and work with them to hire professionals who can capture your staged home in its best light. When it comes time, treat the photo shoot like an open house—everything should be spotless, well-lit, and arranged to show off your home’s best features. BOTTOM LINE Whether or not staging is worth the investment depends on your home’s condition, your desired sale timeline, and your local market. Before committing to professional help or cosmetic upgrades, reach out for a free consultation. I can help you assess the best path forward and connect you with the best professionals to make it happen. The above references an opinion and is for informational purposes only. It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs. References: National Association of Realtors - https://www.nar.realtor/sites/default/files/documents/2023-profile-of-home-staging-03-30-2023.pdf Homelight - https://www.homelight.com/blog/how-to-clean-out-a-house-to-sell/ National Association of Realtors - https://www.nar.realtor/blogs/styled-staged-sold/6-things-home-stagers-wish-real-estate-pros-knew-about-staging Coldwell Banker - https://blog.coldwellbanker.com/home-staging-mistakes-to-avoid/ Zillow - https://www.zillow.com/learn/how-to-stage-house-to-sell/ NAR - https://www.nar.realtor/magazine/real-estate-news/stub-for-148394 House Beautiful - https://www.housebeautiful.com/design-inspiration/real-estate/a61712558/how-to-make-your-house-sell-over-asking-according-to-professional-home-stagers/ HGTV - https://www.hgtv.com/lifestyle/real-estate/15-secrets-of-home-staging-pictures National Association of Realtors - https://cdn.nar.realtor//sites/default/files/documents/2023-03-remodeling-impact-outdoor-features-03-17-2023.pdf Zillow - https://www.zillow.com/learn/what-color-paint-front-door/ Martha Stewart - https://www.marthastewart.com/2126982/how-to-layer-your-lighting Martha Stewart - https://www.marthastewart.com/outdated-lighting-trends-8421744
MORE
7 Mistakes to Avoid When Hiring a Contractor
7 Mistakes to Avoid When Hiring a Contractor
A recent survey found that more than half (52%) of American homeowners have a renovation project planned this year.1 If you’re among them, you know that embarking on home improvements can be both exciting and daunting. According to the survey, the median renovation budget is around $15,000, so you’re probably investing a significant amount—and you’ll want to ensure your project’s success.1One of the most critical decisions you’ll make is choosing the right contractor to bring your vision to life. However, many homeowners fall into common pitfalls during this process, leading to stress, financial strain, and subpar results.In this guide, we’ll explore seven mistakes to avoid when hiring a contractor to ensure your project runs smoothly from start to finish. 1. SKIPPING THE RESEARCH PHASEA common mistake homeowners make is rushing into hiring a contractor without proper research. But to ensure the success of your renovation, it’s crucial to take time to meet with multiple candidates and educate yourself on best practices surrounding your project.If you bypass the interview process, you miss the opportunity to evaluate different approaches, pricing, and expertise. This can result in overpaying or hiring someone whose skills and vision do not align with your needs.Neglecting to research the processes and steps involved can also leave you vulnerable. Not only does it make it more difficult to ask the right questions, but you also risk hiring unqualified professionals or settling for subpar work.What To Do Instead: Educate Yourself — Read up or watch YouTube videos to gain a better understanding of best practices surrounding your project. Interview Multiple Contractors — Search for and interview at least three contractors who specialize in the type of work you need. Ask Specific Questions — Inquire about the processes and materials each candidate will utilize. Seek Recommendations — Get referrals from trusted sources like friends, neighbors, and real estate professionals. I’d be happy to share a list of referrals! 2. CHOOSING BASED SOLELY ON PRICEOnce you’ve interviewed candidates and reviewed their proposals, it’s time to choose your favorite. But don’t make the mistake of rushing to the lowest bid.While it’s natural to want to save money, selecting a contractor based entirely on price can be a costly mistake. Extremely low bids may indicate cut corners, subpar materials, or hidden costs that will surface later.According to the National Association of the Remodeling Industry, when evaluating bids, make sure you’re comparing “apples” to “apples” and considering factors like quality, timeline, and scope.2 Are they fully licensed and insured? How long have they been in business? Do they warranty their work?What To Do Instead: Consider Overall Value — In addition to price, look at experience, reputation, and quality of work. Ask for Detailed Breakdowns — Understand what’s included and what’s not in each bid. Be Wary of Low Bids – Bids that are significantly lower than others may be too good to be true. Invest in Quality — Remember that quality work comes at a fair price, and investing in a reputable contractor can save you money in the long run by avoiding costly mistakes or repairs. 3. NEGLECTING TO CONFIRM CREDENTIALS & INSURANCEWhen you’ve established a good rapport with a contractor, it’s natural to want to believe the best in them. But neglecting to check references and verify licensing and insurance could come back to haunt you.3Hiring an untrained or unlicensed contractor puts you at risk for safety and code violations, not to mention shoddy workmanship. Without proper insurance, you could be left footing the bill for costly repairs, legal issues, or even medical bills if someone gets hurt on the job.4Skipping out on a reference check can be equally problematic. It’s your best opportunity to ensure that their promises and your expectations line up with reality.What To Do Instead: Verify Licensing and Insurance — Confirm that the contractor is licensed according to local requirements and verify insurance, including general liability and workers’ compensation coverage. Check Reviews — Read online reviews and confirm that the business is in good standing with the Better Business Bureau and other relevant trade groups. Call References — When contacting references, ask questions and request to see photos of the contractor’s completed projects. Visit Job Sites — If possible, visit a current job site to observe the contractor’s work in progress and interaction with clients. 4. PROCEEDING WITHOUT A WRITTEN AGREEMENTA handshake deal might seem friendly and straightforward, but it’s a recipe for misunderstandings and potential legal issues. Verbal agreements are difficult to enforce and leave room for miscommunication about project scope, timelines, and costs.5Instead, you should have a signed contract in place before any work begins.3 Paperwork can be tedious, but don’t skip the important step of carefully reading over your contract, asking questions, and pushing back on any terms that make you uncomfortable.Don’t forget to ask for payment receipts and document any change orders or issues that arise throughout the project, as well.What To Do instead: Insist on a Written Contract — Outline all aspects, including scope, materials, timeline, payment schedule, warranty information, and a process for handling change orders. Understand and Agree — Don’t sign anything until you fully understand and agree to all terms. Keep Documentation — Once you’ve made your final payment, request a lien waiver or receipt marked “Paid in Full” to keep on file for legal and tax purposes.6 5. PAYING TOO MUCH UPFRONTAnother common misstep is paying a large sum upfront or the full cost of the project before the work is completed. This can leave you vulnerable if the contractor fails to complete the work or disappears with your money.According to the home services platform Angi, deposits typically range between 10% and 33% of the total project cost.7 The remaining payments should be tied to progress milestones outlined in your contract.Construction attorneys caution against paying a greater share of the project cost than the percentage of the work that’s been completed.3 If you end up dissatisfied with the outcome, you’ll have much less leverage if you’ve already paid.What To Do Instead: Be Cautious — Avoid contractors who demand large upfront payments or cash-only deals. Establish a Payment Schedule — Tie payments to project milestones and stick to them. Pay Only Upon Completion — Never pay in full until the project is completed to your satisfaction and all required inspections have been passed. 6. FAILING TO GET NECESSARY PERMITSSkipping the permit process might seem like a way to save time and money, but it can lead to serious consequences. Without the proper permits, you risk running afoul of local building codes and regulations, which could result in fines, forced removal of work, or even legal action.8Additionally, unpermitted work might compromise the safety and structural integrity of your home, potentially leading to hazardous conditions or diminished resale potential. Homeowners may also find themselves without recourse if issues arise later, as insurance companies often exclude coverage for unpermitted renovations.8If your community has a homeowners association (HOA), don’t forget to check their requirements, as well. You may need prior approval to make modifications to your home or yard. HOAs have the power to enforce these restrictions with fines, and they can even put a lien on your home—so don’t skip this important step.9What To Do Instead: Discuss Permits — Talk about permits and HOA requirements with your contractor before work begins. Include Permits in the Contract — Ensure that obtaining necessary permits and approvals is part of your contract. Verify Inspections — Make sure all required inspections are completed during the project. Keep Records — Keep copies of all permits, HOA approvals, and inspection reports for your records. 7. IGNORING RED FLAGS AFTER THE PROJECT HAS STARTEDSometimes a contractor can check all the right boxes—until the work begins. Unfortunately, red flags that are spotted mid-project can be especially challenging to address.If you’ve already paid a substantial amount or had a portion of your home demolished, you may feel trapped in a bad situation. However, if there are major problems that the contractor is unwilling to address, ignoring them can make things exponentially worse.Don’t be afraid to seek legal or professional advice if issues persist. Taking immediate, informed, and decisive action is crucial to safeguarding your investment and ensuring the project’s ultimate success.10What To Do Instead: Review Your Contract — Make sure you thoroughly understand your rights and the agreed-upon terms. Document Issues — Keep detailed records, including dates, descriptions of problems, photographs of subpar work or materials, and any communications with the contractor. Communicate Professionally — Arrange a meeting to discuss your concerns, ensuring you remain calm and professional while clearly expressing your expectations. Request a Resolution Plan — Ask for a plan to address the issues, set a timeline for resolution, and put everything in writing to ensure you’re both on the same page. Seek Advice — If the contractor is uncooperative or dismissive, consider seeking advice from a legal professional. You could also contact your local licensing board or consumer protection agency for guidance. BOTTOM LINEHiring the right contractor is crucial to the success of your home improvement project. By avoiding these common mistakes, you can significantly increase your chances of a smooth and successful renovation experience.Remember, taking the time to thoroughly vet contractors, communicate clearly, and plan carefully will pay off in the long run. Your home is likely your most significant investment, and it deserves the care and attention that comes with making informed, thoughtful decisions about who works on it.If you’d like help finding a contractor or want to know how planned improvements could impact your home’s resale potential, reach out for a free consultation! The above references an opinion and is for informational purposes only. It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.Sources: USA Today – https://www.usatoday.com/money/homefront/moving/home-renovation-statistics/ National Association of the Remodeling Industry – https://remodelingdoneright.nari.org/Homeowner-Resources/Questions-to-ask/How-to-select-a-remodeler The Washington Post – https://www.washingtonpost.com/home/2024/07/08/how-to-find-good-honest-contractor/ MarketWatch – https://www.marketwatch.com/guides/insurance-services/home-insurance-during-renovations/ LegalZoom – https://www.legalzoom.com/articles/oral-contracts-do-they-carry-any-weight Better Business Bureau – https://www.bbb.org/all/home-improvement/your-home-improvement-contract Angi – https://www.angi.com/articles/how-much-should-i-pay-general-contractor-prior-starting-job.htm Bob Vila – https://www.bobvila.com/articles/remodel-without-permit/ Bankrate – https://www.bankrate.com/real-estate/hoa-homeowners-association-rules/ Angi – https://www.angi.com/articles/how-complain-contractors-effectively.htm Andrea Hamacher CA DRE:01858698 Buying or selling a home is one of the most important things you'll ever do. I'm here to make the process as smooth as possible. My extensive experience in San Diego and Riverside County will benefit you whether you are looking to buy or sell in the area. Buying a home? In this tough market, I'll take time to help you find the home you really want. I can recommend excellent lenders who will help prepare us to make winning offers. My negotiation skills and relationships are key in today’s multiple offer environment. Selling your home? My expertise in the local real estate market will ensure you get the best price for your property. My finely-tuned marketing program will ensure the right people see your home. Once in escrow, my systems will help move us toward on-time closings. Click on REAndrea.com for more info and MLS searching. 5.0 41 Client Recommendations
MORE
Top 4 Factors to Consider When Choosing Your Mortgage
Top 4 Factors to Consider When Choosing Your Mortgage
With home prices and rates still relatively high, securing a mortgage can feel daunting––even to the most experienced borrowers. But don't let that deter you: If other homebuyers' experiences are any indication, odds are you'll eventually find a home loan that works well for you. In fact, most U.S. homeowners say they're satisfied with the mortgage they received, according to a recent Bankrate survey. The vast majority of the surveyed homeowners (69%) said they'd buy their current home again if they had a do-over.1 The key to finding the right home loan for you is to look for one that you’ll feel comfortable with long after you've closed on your new property. In addition to comparing term lengths and mortgage rates, also consider how the loan will fit your daily life and preferences. For example, I recommend asking yourself questions such as: Are you a natural risk taker, or do you prefer firm plans and predictability? Can you afford a bigger mortgage payment if interest rates increase, or are your anticipated home expenses already stretching your monthly budget? To help you get started, I've rounded up four of the most important factors to consider when narrowing your list of potential mortgage options. 1. Your Credit Score That three-digit number that credit scoring companies like VantageScore and FICO assign not only influences your interest rate, but it also helps determine the type of mortgage you can get. To secure a conventional mortgage from a major bank or credit union, you'll typically need a FICO score of at least 620. But some mortgage types require even higher credit scores.2 For example, to qualify for a U.S. Department of Agriculture (USDA) loan to buy a qualifying rural property, you'll need a minimum FICO score of 640. Or, if you're seeking a supersized loan, such as a jumbo mortgage (which are home loans above $766,500 to $1,149,825, depending on where you buy the home), you may need a FICO score of at least 700 or more.2 You still have options, though, if your credit score is lower. You may be able to get a Federal Housing Administration (FHA) loan with a 580 credit score if you have enough cash saved for at least a 3.5% down payment. And if you have at least a 10% down payment, you may qualify even if your score is in the 500 to 579 range. Alternatively, if you're a military service member, veteran or spouse, you may be able to get a U.S. Department of Veterans Affairs (VA) loan with little or no money down with a credit score in the 580 to 620 range.2,3 Some regional banks and credit unions may also be more flexible than others with minimum required credit scores.4 But if you can afford to wait, you may be better off paying down your debt first so your score can improve. The interest you save with a more competitively priced loan could enable you to buy a more desirable home. 2. Your Income and Expenses The amount of money you make, as well as how much you owe, will also influence your mortgage options. Lenders like to see that you still have plenty of income left over after paying your expenses and generally prefer that you spend no more than 28% of your income on housing, or a maximum of 36% (which is the cap that federally-sponsored lenders Fannie Mae and Freddie Mac advise).5 A mortgage lender will also compare your expected income to the total amount of debt you'll carry once you've bought the home.6 This is called your debt-to-income (DTI) ratio, and lenders consider it a key indicator of whether you can afford a particular mortgage. In fact, research by NerdWallet found that a high DTI ratio is the most common reason mortgage applications get rejected.6 In addition to outstanding debts, lenders factor in other expenses unique to a home, such as property taxes, homeowners insurance, and homeowner association fees. Your approval odds will be higher if you have a DTI ratio below 36%.7 But if you have great credit and ample cash, you may still be able to get a conventional loan with a DTI ratio in the 45% to 50% range.8 If not, you will likely need to look to other “non-conforming” loan types, such as government-backed mortgages. With a FHA loan, for example, you may be able to get away with a DTI ratio of 43% to 57%, depending on your credit history and savings. Similarly, if you qualify for a VA loan, you may be able to get one with a DTI ratio of 41% or more. USDA loans, on the other hand, are a bit stricter. To get approved, your DTI ratio can't be higher than 41% and your income must be below a certain threshold for your family type.6 3. Your Expected Down Payment The size of your down payment will also impact the type of mortgage you can get. You don't have to put down 20% to qualify for a conventional mortgage, but you will need a significant amount. According to the National Association of Realtors, the median down payment amount in 2023 was 14%. For younger buyers under the age of 33, it was 8%.9 In some cases, a larger down payment may also help you qualify for loans you might not otherwise. For example, it can be tough to get a mortgage when you're self-employed. But some conventional lenders may be willing to work with you if you put down more than 20%.10 If your cash reserves are slim, then you may want to consider an FHA loan instead, which only requires 3.5% down.11 Or, if you qualify for a USDA or VA loan, you may be able to skip the down payment altogether and buy your home with no money down except for a small funding fee.11 Keep in mind, though, that a smaller down payment will likely mean a larger monthly payment. Plus, you'll not only pay more interest overall and be responsible for a larger principal, you'll also need to take out mortgage insurance. Conventional loans require private mortgage insurance (PMI) if your down payment is below 20%, while FHA loans always require insurance.12 How much you spend on mortgage insurance will also vary, depending on the size and type of loan you choose, as well as your credit score and other factors. For example, FHA mortgage insurance premiums (MIPs) are generally more expensive than PMI and also require an upfront payment at closing on top of annual premiums.12 Insurance for adjustable rate mortgages (ARMs) also tends to be on the higher side.13 4. Your Lifestyle and Risk Tolerance In addition to your budget, one of the most important factors to consider when comparing mortgage options is your temperament. For most Americans, a mortgage is a decades-long commitment. So it's important to find one you can happily live with—and comfortably repay—for the long haul. Most fixed rate mortgages, for example, are designed to last anywhere from 15 years to three decades or more, with 30-year mortgages being the most popular option.14 When you spread out your repayment over such a long period, monthly payment amounts are smaller, so you can slowly chip away at your debt at a leisurely pace. The catch is you also pay more in interest. With a shorter mortgage term, by contrast, you pay less overall. But your monthly payment amount will also be much higher.15 For some homeowners, the long-term savings are worth it. But if keeping up with your mortgage requires significant lifestyle adjustments, then you may come to regret it. Another way to lower your monthly payment in the short term is to choose an adjustable-rate mortgage (ARM) that offers a low fixed APR for a lengthy period (typically five, seven or 10 years) before changing to a variable rate.16 This can be an especially useful loan type if you only plan to stay in the home for a relatively short period. But buyer beware: ARMs can be risky if you don't plan ahead for a higher interest rate.17 BOTTOM LINE Regardless of the loan you choose, it pays to shop around and carefully compare terms. According to research by LendingTree, most homebuyers risk leaving money on the table by sticking with the first lender that they meet.18 Fortunately, I have a vetted list of mortgage professionals who can explain your options, answer your questions, and help you find the best loan to meet your needs. I can also develop a custom plan for securing a great home that fits your budget. Reach out when you're ready to get started. The above references an opinion and is for informational purposes only. It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs. Sources: Bankrate -https://www.bankrate.com/mortgages/home-affordability-report/ Bankrate -https://www.bankrate.com/real-estate/what-credit-score-do-you-need-to-buy-a-house/ U.S. News & World Report -https://money.usnews.com/loans/mortgages/va-loans Newsweek -https://www.newsweek.com/vault/mortgages/bank-vs-credit-union-for-mortgages/ Bloomberg -https://www.bloomberg.com/news/articles/2024-05-17/how-much-income-do-you-spend-budget-for-home-mortgage-in-us NerdWallet -https://www.nerdwallet.com/article/mortgages/debt-income-ratio-mortgage Bankrate -https://www.bankrate.com/mortgages/why-debt-to-income-matters-in-mortgages/ Bankrate -https://www.bankrate.com/mortgages/how-interest-rates-are-set/ National Association of Realtors -https://www.nar.realtor/sites/default/files/documents/2023-home-buyers-and-sellers-generational-trends-report-03-28-2023.pdf Bankrate -https://www.bankrate.com/mortgages/self-employed-how-to-get-a-mortgage/ Bankrate -https://www.bankrate.com/mortgages/no-down-payment-mortgage/ CFPB -https://www.consumerfinance.gov/ask-cfpb/what-is-mortgage-insurance-and-how-does-it-work-en-1953/ Bankrate -https://www.bankrate.com/mortgages/basics-of-private-mortgage-insurance-pmi/ MPA Magazine -https://www.mpamag.com/us/mortgage-industry/guides/the-7-most-popular-types-of-mortgage-loans-for-home-buyers/255499 Investopedia -https://www.investopedia.com/articles/personal-finance/042015/comparison-30year-vs-15year-mortgage.asp NerdWallet -https://www.nerdwallet.com/article/mortgages/adjustable-rate-mortgage-arm Federal Reserve Bank of St. Louis -https://www.stlouisfed.org/on-the-economy/2024/feb/which-households-prefer-arms-fixed-rate-mortgages LendingTree -https://www.lendingtree.com/home/mortgage/shopping-around-survey/
MORE