Mortgage 101: What To Know Before You Apply

Everybody loves talking about mortgages. They’re fun, easy to understand, and a great icebreaker, right?….Wrong. Thanks to their lengthy process, technical jargon, and confusing options, mortgages have a bit of an intimidating reputation—but it doesn’t have to be that way!

If you’re in the process of buying a new home and dreading the mortgage application process, here’s what you need to know to keep things running smoothly. 

Know How Much You Can Spend

If you’re feeling antsy about getting started and want a general idea of how much loan you might qualify for, consider the 28/36 rule, or the Debt-to-Income ratio—AKA what most lenders use to help calculate your mortgage. 

Essentially, the 28/36 rule means that your monthly mortgage payment shouldn’t be more than 28% of your gross income. Additionally, your outstanding debts—like mortgage, car loans, student loans—shouldn’t account for more than 36% of your gross income.

Get Your Finances in Order

Not seeing the numbers you were hoping for after calculating your Debt-to-Income ratio? Then, hopefully, you’ve given yourself a little time to shift things in your favor. Paying off loans, improving your credit score, avoiding big purchases—these will all help you change those numbers. 

Of course, completing those tasks is a little harder to do in practice than in theory, so you may have to take a look at your budget and see where you can cut out some extras—at least temporarily!

What You’ll Need to Apply

In the weeks before you plan on applying for a mortgage, you should start collecting all of the documents you need. Since a lender will be telling you exactly how much money they’re willing to loan, they’ll need a comprehensive understanding of your finances beforehand. Start gathering things like:

W2s/tax returns
Photo ID
Your two most recent pay stubs
Current and prior addresses
Asset information (retirement funds, 401(k), stocks and bonds, other investments) 
Gift letters

Depending on the lender you choose, you may need additional documents, so consider calling in to double-check beforehand. 

Find the Right Mortgage

Once it’s time to start thinking more concretely about applying for a mortgage, you have several options to consider. While all the mortgage options out there could easily fill a whole blog post on their own, here’s a quick rundown to give you a general idea:

Conventional/Fixed-rate:  The interest rate of a fixed-rate loan won’t change over time, making it a popular choice for its predictability. Conventional loans typically require a 20% down payment or mortgage insurance for smaller down payments.
Adjustable-rate: The interest rate of adjustable-rate mortgage will fluctuate over time, sometimes lower than fixed-rate, sometimes higher. There is a cap in place so the rate doesn’t get too out of control, but ARMs are typically more popular with those who plan to refinance.
FHA: If you are struggling to come up with a down payment, you may have options with an FHA mortgage. Provided by the Federal Housing Administration, these loans come with a low down payment requirement and built-in mortgage insurance.
USDA: Live in a rural area? Then check out your USDA eligibility! A surprising amount of areas qualify for USDA loans, even if you aren’t living in the countryside. Plus, USDA loans don’t require a down payment and offer lower insurance premiums.

These aren’t the only options you’ll have, just the most common. If none of these sound right or you aren’t sure which to choose, just ask your lender!

Choose the Right Lender

When it comes time to decide who to work with, you’ll have to do your research. Each lender is different, meaning they’ll likely offer you different rates, charges, and loan options. 

Luckily, we’ve been working in real estate around the area for years, so we know exactly which lenders are right for which buyers. If you need a few suggestions before you kick off your search, just let us know! 

Still Have Questions?

That’s okay—we get it. Applying for mortgage is confusing and challenging, especially if it’s your first time. If you have any questions about the process, we’re here to help. 

Ready to start looking at a few homes in your price range? We can help with that, too! Check out our specialized search tool to narrow down your options, and give us a call to start seeing a few in person!

5 Effective Ways to Organize a More Sustainable Construction Site

It’s safe to say that climate change is one of the biggest threats mankind has ever faced. We are aware this might sound a bit dramatic, but it’s true. This is why most corporations, companies, and small businesses are trying their best to be more environmentally conscious.

The case is the same with commercial and residential construction companies. These businesses have been under a lot of scrutiny because their construction sites are considered to be one of the biggest polluters in the world. However, a lot of construction companies don’t want to change their way of doing things simply because being eco-friendly costs more money. To be completely honest, being green costs a bit more, but it’s the responsible thing to do. So, for everyone who wants to have a more sustainable construction site, here are the 5 effective ways to organize it that way.

Make Sure You Use the Right Equipment

It doesn’t matter if you’re constructing a commercial building or a house, if you want to preserve the environment, you have to use eco-friendly equipment. This means you can’t work with machines that use diesel because this fuel is extremely bad for the environment. We realize that finding proper equipment that’s also good for the habitat is not a simple task, however, there are some companies that sell and rent this type of construction equipment. If you live in Australia, you can find a trusted company for crane hire in Melbourne. This low-pollution machinery is also very easy to use, which will make your job simpler and more enjoyable.

Use Only Recycled and Eco-Friendly Materials

Most people usually don’t use recycled materials for their home simply because if the material isn’t brand new, they think it’s not good enough. However, using new material is a bad thing because that means a lot of excess material from other construction sites will only become waste that will pollute the environment. Instead, all of that excess wood and other materials can be recycled and reused on a different building or a home. So, if you want your construction site to be green, make sure to use only recycled materials. Also, you should try your best to avoid materials like plastic and styrofoam. This way you will preserve nature by reducing the waste and your carbon footprint. By doing this, you will set a wonderful example to other commercial and residential building companies.

Manage Your Waste Responsibly

Construction companies use a lot of material for their buildings, however, a lot of it ends up being unused. This excess material usually becomes waste which then pollutes the environment. This is rather unfortunate because all of this wood, steel, and plastic can be recycled and used as a material on another construction site. However, if you don’t want to leave a lot of waste after you finish your job, make sure to have a good and responsible waste management policy. The old-fashioned linear approach “make, use, dispose” doesn’t work anymore, which means you have to find a way to recycle all the material that ends up being unused.

Make Your Transportation Economic and Efficient

One of the biggest reasons why construction sites are such big polluters is the fact that material has to be transported to the construction site from many different locations. Most companies use trucks that consume a lot of fuel which is not good because it contributes to the carbon dioxide emission. Therefore, if you want to have an eco-friendly construction site, you should definitely consider making your transportation more economical and efficient. You can do this by using high-quality fuel, purchasing your materials locally, and by having on-site suppliers. The last two will reduce the number of journeys to and from the construction site, which will drastically reduce the emission of carbon dioxide. This is one of the best ways to be more efficient and preserve the environment.

Make Sure Your Crew Uses Reusable Mugs, Bottles, And Food Containers On the Site

This might sound silly and trivial at first, but you should know that most of the garbage on construction sites is from plastic coffee mugs, water bottles, and single-use food containers. This shouldn’t come as a surprise because a big crew that spends a lot of time on a site simply has to eat and drink in order to get the job done. So, if you don’t want to leave a lot of garbage and waste on your construction site, you should invest in reusable coffee mugs, water bottles, and food containers.

These things really do make a difference, so if you want to be responsible and have an eco-friendly construction site, make sure to apply some of these tips on your next job.