Michele's Blog

Summer is here, the pressure from the hectic end-of-the-year school activities has passed, and the school buses have made their way to the corporation yard for the next few months. While this is a welcomed change for many overscheduled families, this can also be a time where many of us start wondering how to maximize the time we have over summer break. Keeping the kids occupied yet still having time to enjoy relaxation and recreation together can be challenging, especially if you want to do it without spending a fortune on lavish vacations!

Here are some budget-friendly activities that everyone in the family can enjoy while getting to know your community and all it has to offer!

1. Have a summer kick-off party with the neighbors

This has become one of our favorite events every year to reconnect with our neighbors after months of hibernation! Bring a grill or two out in the cul-de-sac (or someone’s driveway if you don’t live in a court), and have everyone contribute a side to share or something to throw on the grill. The kids can dust off their bikes and create beautiful masterpieces with sidewalk chalk while the adults mingle and enjoy some great conversation.

2. Camp in your backyard

Yep, that’s right. Pitch a tent, get the sleeping bags out, build a fire in the firepit and have fun roughing it for a night!   Make smores and roast hot dogs, then wrap up the night with stories by flashlight or hide and seek in the dark. If you’re feeling extra adventurous, you can even cook up some bacon and eggs over the fire in the morning for breakfast.

3. Check out the local farmers' markets

Many communities have markets on the weekends, but a few also have them one evening a week. This is a great way to get the family interested and excited about trying out new foods (seriously, have they ever eaten a dragon fruit? Give it a try!). You are likely to find a wide variety of food options and live music to enjoy, and often you’ll even find a few booths set up with free kid’s activities. Bring some camp chairs or throw a blanket down and enjoy a great picnic together while you support local business and agriculture!

4. Enjoy scavenger hunts?

Take it up a notch and go geocaching as a family! Geocaching is a great opportunity to head out and explore the great outdoors together while searching for hidden treasure. You can download an app and follow clues to lead you to secret “caches” planted by others that have gone before you! Remember to bring something to add to the cache as well! It is the ultimate treasure hunt and practically free!

5. Go bowling!

Bowling has to be one of the most underrated of summer activities. It’s air-conditioned (save it for a super hot day!), fun for all ages, inexpensive, and most of the larger bowling alleys have terrific food! There are often summer bowling packages for the whole family, some even offer specific hours where kids bowl for free. Invite some friends and make a day of it… the kids will entertain each other and give the adults a chance to socialize a bit as well.

6. Plan a neighborhood bike parade

Send invites to the neighbors two weeks or so in advance and have the kids decorate their bikes or scooters and ride out around the block while the parents cheer them on!   You can use sidewalk chalk to create a “track” and offer arrows for directions to keep everyone on course, and even turn it into a potluck style block party

7. Take a hike  

Great hikes for all ages in your area can easily be found using Google. Put on your walking shoes and pack plenty of water, snacks, sunscreen, and maybe even a beach towel, depending on where you’ll end up. Once you hit the trail it’s often nice to take your time - even burn up several hours of your day and provide a grand adventure! Be sure to bring a container or bag to collect treasures along the way, and don’t forget your phone in case of trail emergencies (and you’ll have a camera built in for capturing the magic)!

8. Volunteer at a local food bank or nonprofit  

We often get so buried in everyday life with school and activities and birthdays and travel that we don’t take the time to come together as a family and work towards a common goal. Every parent wants to teach the importance of giving to their children, but it’s often hard to think of ways to accomplish this. Volunteering at a local food bank is an eye-opening experience that can help show children (and us too!) about gratefulness, empathy, and kindness. Summer is a great time to do this because many of the food banks are running low on supplies and volunteers.

Contributed by Guest Blogger Laura Clavero, Regional Processing Manager

When you’re shopping for a home, choosing the neighborhood that works for you is just as important – possibly more important – as choosing the right home.  Knowing what you’re looking for is half the battle, and knowing where to look to get the information you need can help make your decision easier.

Here are 8 areas to consider when selecting the right neighborhood for you and your family: 

1. Safety.  What are the crime rates in the neighborhood you’re considering? Are they on the rise or declining?  You can find a wealth of information by visiting the local police department and asking, as well as accessing local crime rate statistics at www.crimereports.com
   
   
2. Lifestyle.  Are you interested in a more urban, suburban or rural neighborhood? Urban neighborhoods have neighbors close by in often dense housing, but offer a more “center of the action” experience.  If you don’t mind people close by, but don’t want them in your back pocket, perhaps suburban is a better fit.  Want to be off the beaten path without a neighbor in sight?  Perhaps have acreage around your home?  Rural might be the right fit for you.
   
   
3. Commute.  In some areas, commute patterns rule the universe. Being 5 miles from your office, but 5 miles in the wrong direction, could mean a deceptively miserable commute.  You can get a calculation of commute times at https://www.google.com/maps by entering in a starting address and your work address, then selecting the time of day you expect to be driving by using the DEPART AT dropdown.  This will give you typical driving times at specific times of day.
   
   
4. Amenities.  Having stores, restaurants and other conveniences close by can make all the difference in your ultimate satisfaction with a neighborhood. Find the stores you frequent (or similar types of those stores) and compare the locations with your new neighborhood. Want to be able to make a quick trip to a major supermarket?  Your neighborhood may be miles from the closest store.  How about a dentist or hospital or even your favorite gym?  You can search for these and other amenities by entering up the address on https://www.google.com/maps and clicking the NEARBY button just below the address.
   
   
5. Future Development.  What are the plans for your neighborhood? Is a major redevelopment project going on in the upcoming months or years? Will this affect property values?  Traffic?  General congestion?  The local Chamber of Commerce is a great source for finding out what’s on the horizon.
   
   
6. Jobs.  What is the job outlook for the area you’re considering?  Are there plenty of jobs currently?  Are there any plans for large companies to enter or leave the area? Even if you are gainfully employed at the moment it’s important to know what’s available in the event you decide your job isn’t working for you or your family.  The Chamber of Commerce can likely assist with this information as well.
   
   
7. Affordability.  Is the housing market red hot in the area you’re interested in?  Or is it cool as a cucumber with plenty of available properties?  What are the property tax rates?  Are they fixed and protected, or do they fluctuate?  What is the overall cost of living index for the neighborhood?  These are all important questions, as you want to be sure you aren’t cash poor after the purchase of your home. You can compare major metropolitan areas at https://www.payscale.com/cost-of-living-calculator .
   
   
8. Schools.  If you have (or plan to have) children, school performance will be very high on your list of criteria.  Many school districts don’t allow transfers, so knowing the ratings your neighborhood schools is critical for your own children – but also for resale even if you don’t have kids yourself.  You can find ratings, reviews and statistics on schools in any neighborhood by visiting https://www.greatschools.org .

There are many factors in choosing the right neighborhood for you, but if you take the time and do your homework you can find the right fit for you and your family.  Start by nailing down an ideal profile, then think about what you want in a home.  Write down your vision of home and share it with your real estate professional so that the homes you preview during your house hunting meet your criteria.

You’ve heard about credit scores and know that they are considered important, but why should you care about your credit score? Your credit score is looked at for multiple reasons - sometimes by employers, landlords, your bank, but also anytime you apply for a loan, including a home loan. Understanding credit scores and how they’re calculated will help you check into and improve your own score so you can have better credit when you are ready to purchase or refinance your home.

How a Credit Score is Calculated

The most common credit score used is called your “FICO™” score, standing for Fair Isaac Corporation. FICO™ scores were first used with lenders in 1989. This score can affect how much a lender will loan you and at what interest rate. The score is calculated using information contained in your credit reports with each of the three main reporting agencies.

While the exact formula is unknown, we do know that FICO™ scores are calculated by considering five different categories. The importance of each varies as well as the factors within every category:

Payment History - Weight: 35%

Have you paid past credit accounts on time? How many accounts have late or missed payments?

Amounts Owed - Weight: 30%

How much do you owe on your credit accounts and how many accounts do you have? How much of your total available credit are you currently using?

Length of Credit History - Weight: 15%

How long have your credit accounts been established? How long has it been since you last used some of those accounts?

Credit Mix in Use - Weight: 10%

What types of credit accounts do you have? How many different types of credit accounts are you using?

New Credit - Weight: 10%

How many new accounts or recent inquiries do you have? How long has it been since you opened a new account?

These are general guidelines of what is considered and can vary from person to person according to what information is contained in their credit profile.

Credit Score Ranges

Base FICO™ scores range from 300-850. Lenders have different definitions of what range of scores are considered “good” or what scores will receive better programs and rates. In general though, this range represents what the different scores mean:

800 +:     Exceptional

740-799:  Very Good

670-739:  Good

580-669:  Fair

< 580    :  Poor

Even if your credit score is not in the good or higher range, there are still plenty of loan programs that you may qualify for. Talk to APM about our minimum credit scores for certain loans and other specialty loan programs that may be a fit for your situation.

Positively Impact Your Credit Score

Once you understand how your credit score is calculated, there are things you can do to improve your score. Here are some easy ways to make a positive impact:

• Make all payments on time. Set reminders or have payments made automatically.
• Create some balance in how you reduce your debt. While paying down installment debt (car, school, mortgage, etc.) will definitely boost your credit score, paying down or paying off revolving debt, such as credit cards, can cause a quick jump in your credit score. The trick is to get and keep your balances below 30% of your credit limit on each card. For faster results, attack those cards with balances closer to their respective credit limits first, as opposed to those cards with the highest debt.
• Check for errors. Get a free copy of your credit report and look it over carefully.

Avoid Negatively Impacting Your Credit Score

Keep your credit score healthy and ready for that upcoming home purchase by avoiding anything that negatively impacts your credit score.

• Avoid opening too many new accounts in a short amount of time. Let accounts have some aging time.
• Avoid moving debt around to multiple cards. Focus on reducing the amount instead.
• Do not close out a card. A sudden drop to your credit-spending power does not look good to the bureaus. You can keep it active by perhaps using it to pay a monthly utility bill.
• Avoid “quick-fix” credit solutions. Manage credit responsibly over time and your score will improve.

Additional Resources

APM has you covered with all you need to know about your credit score and getting ready to start your homeownership journey. Check out the following for further information about credit scores:

• 4 Tips to Help Improve Your Credit Score Long-term
• Top 5 Questions to Understanding Your Credit Score
• How Can I Get my Credit Score?
• The Ins and Outs of a Credit Score
• What Credit Score is Needed to Buy a House
• Credit Score: Here’s What You Should Know When Buying a Home
• What is a Good Credit Score?

Once you’ve decided to sell, you’ll likely need to do some reorganizing, cleaning and staging to set your home off in the very best light.  Holiday decor can be beautiful, yet also highly personal, so it’s necessary to keep things neutral and allow for room for the buyer to envision their own holiday gatherings (without tripping over the 35 snowmen on your front stoop).

Here are a few tips on staging during the holiday season:

Stage first. Talk to your REALTOR® about how best to stage your home.  Removing clutter and personal effects is a start but take a long look at your furnishings and artwork to ensure your home shows at its very best.  Take extra furniture to storage (don’t store in your garage - buyers will see it there and wonder why it’s not in the house) and keep clear sight lines and pathways for an open and airy feeling.

Decorate with restraint.  Having a Christmas tree or a menorah on display is fine, as long as it doesn’t take over the entire room. Small, tasteful decorations sprinkled throughout the house give the buyer a sense of what they could/would do during the holidays if they lived there.

Keep it cozy.  Subtle touches that create a holiday vibe work wonders.  A bowl of cinnamon-scented pine cones in the center of your table.  A wreath hung over the fireplace gives a sense of warmth and a wonderful evergreen smell to complete the festive feeling.

Don’t lose your palette.  Be sure your holiday decor compliments your current home’s look and feel.  If your living room is painted a beautiful blue, perhaps skipping the red garland and go with a more winter wonderland feel with silver bells and snowflakes.  If your living room is gray or taupe, going with some cranberry garland or earth-toned trimmings will work nicely.

Don’t forget the outdoors.  Keep away from large blow-up displays or lights that pulse to the beat of Jingle Bells.  Stick with simple lights and a small display on your porch this year.

At the end of the day, you want to show your home off in its best light.  That means allowing space for the buyer to see the walls and floor without dodging huge holiday displays.   Let this holiday season be your perfect season for buying or selling your next home.

The advantages of using a Doctor Loan

You can get into a home faster.  A Doctor Loan takes into account a new practice, or even an employment contract, during the qualification process.  Instead of waiting for your new clinic to be up and running, and having 2 years of bank statements and tax returns, the underwriter takes your employment contract into account when calculating your income.  Most Doctor Loan guidelines require that the new position be contractually in place within 60 days of closing, so be sure to have your contract reviewed as early as possible in the loan process.

You can avoid costly PMI.  Doctor Loans typically do not require PMI for down payments under 20%, like conventional loans do.  Since PMI is expensive - and not tax deductible - this helps keep payments lower, freeing up cash to pay off other debts (such as student loans).

It’s easier to qualify.  Typically, when you qualify for a mortgage, all payments (deferred or not) are included in the debt-to-income ratio.  With a Doctor Loan, deferred student loan payments do not get wrapped into the overall debt ratios.  For medical professionals early in their careers, this can make all the difference in getting the home they need, while they’re still building their practice.

The disadvantages of a Doctor Loan

Getting in over your head.  Because you can qualify without using your student loan debt against you, it can make the overall payments difficult to manage if your practice takes awhile to get off the ground.  Additionally, those student loan payments will start up eventually, and will eat away at what disposable income you may have.

Buying a home before you’re ready.  Just because it’s faster, doesn’t always mean it’s better.  If you’re a dentist relocating for your “dream job,” buying a home to finish the picture seems like a good idea.  It’s not so great if you ultimately decide your job isn’t so dreamy - or you don’t like the new city you’ve moved to.  If you decide to relocate again, you’ll likely have to sell your home to buy a new one wherever you land.  

At American Pacific Mortgage, we have a full suite of expanded access programs for many types of borrowers.  Our Doctor Loan Program has loan amounts as high as $2,000,000 in some cases, allowing for a purchase previously out of range.  Looking to refinance an existing home loan?  We’ve got you covered - this program has guidelines for both purchase and refinance transactions.

Our priority is creating experiences that matter - for all of our home buyers and home owners.  It’s our way of saying thank you.

*with proof of 12 months deferment or forbearance.

Looking to Buy While You Are Selling?

Buying a home is thrilling and exciting and terrifying all at once.  Add in the fact that you haven’t sold your current home, and there are many more moving parts to your transaction.  In a hot real estate market, sometimes you have to jump in and make an offer before you’re quite ready (or able) to sell your current home.  If you have a hefty savings account and income sufficient to qualify for both of your mortgages, it might not be a problem, But for millions of homeowners, this scenario requires a different solution.

First and foremost, you can consider submitting an offer with a contingency.  While this makes things easier on paper, it can affect the desirability of your offer - especially in aforementioned hot markets.  Putting your current home up for sale first can mitigate some of this risk for the seller of your new home, but there will likely still be some sort of contingency in the event your home doesn’t sell or the sale falls through.

In order to put yourself in a position of strength at the negotiating table, you’ll want your house to be sold, and all contingencies from your buyers signed off prior to submitting your offer.  Again, this is an ideal scenario, but not necessarily practical.

Enter the Bridge Loan:

A Bridge Loan is a short-term financing solution that allows you to finance two homes at once, temporarily.  Once you sell your current home, you pay off the temporary bridge loan and are left with the one mortgage on your new home.

American Pacific Mortgage offers two programs to secure your bridge financing:

• The first is our Close with Confidence program, which is used when your current home is already pending sale, but not yet closed.  The equity from your current home is used to fund the purchase of your new home. This option can have a term as long as 3 months and can exclude the payment on your departing residence from your overall qualifications on your new home if the home is in contract.
• The second option is our Debt Inclusive program, which doesn’t require that your departing residence is sold - only that it is listed for sale.  The term for this option can be as long as 4 months but includes all of the payments (current mortgage, bridge loan, new home) to be factored into your qualifications on your purchase.

Either way, you can get the equity out of your current home to facilitate your new home - without the seller looking askance at whether your offer is bonafide.  Add an APM approval letter and you’ve put yourself as close to a cash buyer as possible without having to actually have cash on hand for the purchase. This puts you in a much better negotiation position with the seller and takes a load of the worry out of the gymnastics required when buying and selling at the same time.

Be sure to talk to Michele about what option might work best for you, and put yourself in the driver's seat for your next home purchase.

As a first-time home buyer, it can be overwhelming to hear all the stories from friends and family about home loans. Often times you’re left with a lot of assumptions and not all of the facts about the process, possibly keeping you from taking the steps toward getting the home you’ve been dreaming about.

We’re happy to clear up the facts and make sure you’ve got the information you need to make a homebuying decision. Let’s bust some down payment and private mortgage insurance (PMI) myths right now!

Down Payment and PMI Myths

Myth #1: Borrowers need at least a 10% down payment.

The Facts: The majority of first-time home buyers believe they need at least a 10% down payment (source: NAR), but that’s simply not true with all of today’s different loan types and programs. Average down payments are generally in the range of 5-10% but there are loan programs that allow as low as 3% and even a few no-down loan options.

Myth #2: PMI is always required on home loans with less than 20% down.

The Facts: PMI is generally required by the lender when a borrower purchases a home using conventional financing with less than a 20% down payment. But there are loan programs available that don’t require PMI. VA Loans do not require PMI and neither does our new No MI Advantage Loan. There are other loan programs with possible reduced mortgage insurance, so be sure to check in with us to find out what might fit your particular situation.

Myth #3: PMI protects the borrower.

The Facts: Many borrowers make the mistake of thinking that PMI is insurance that either protects the home or protects them if they end up in a foreclosure situation. PMI is in place to protect the lender from default on the loan, which enables lenders to help more borrowers get loans. It does not provide protection for the borrower if they go into foreclosure. And PMI is not to be confused with Homeowner’s Insurance, which is required and protects the physical home and property.

Myth #4: PMI cannot be canceled.

The Facts: PMI is in place to protect the lender when there is less than 20% equity built up. Once more than 20% equity is in place, PMI can be removed. PMI will automatically be terminated when the principal balance reaches 78% of the original value. You can also request cancelation sooner in writing if your home value has increased enough (contact your lender for exact requirements and instructions).

Now that you know more of the facts about down payments and PMI, are you feeling motivated to begin your homeownership journey? APM is here to help educate you and clear up any misinformation on the home loan process. We are standing by to answer your questions and help you every step of the way!