Author: First Western Trust Bank

Tips for Preparing for a Home Appraisal

Posted on by First Western Trust Bank

Getting your home appraised can be a nerve-wracking experience, especially if you’re looking to maximize its value. The appraisal will determine your property’s market value, affecting everything from your selling price to your refinancing options. In this article, you will learn why individuals get a home appraisal and when to get one, as well as tips to help you prepare for an appraisal and ensure your home gets the highest value possible. 

Reasons for Getting a Home Appraisal

  • Buying a Home: To determine the fair market value and ensure your price is appropriate.
  • Selling a Home: Set a realistic selling price based on the current market value.
  • Refinancing a Mortgage: To establish the property’s current value, which affects the loan amount and terms.
  • Home Equity Loans or Lines of Credit: To assess the property’s value, which influences the amount you can borrow against your home equity.
  • Property Tax Assessments: To challenge or appeal property tax assessments by providing an accurate valuation.
  • Divorce Settlements: To fairly divide the property’s value between parties.
  • Estate Planning and Settlements: To determine the value of a property for estate planning or distribution among heirs.

When to Get an Appraisal?

In obtaining a mortgage or refinancing a property, the home appraisal occurs after you get pre-approved for a loan but before the final loan approval. Here is the typical sequence of events:

  • Pre-Approval: You get pre-approved for a loan, which involves providing financial information to the lender. This step determines how much you can potentially borrow.
  • Property Selection and Offer: You find a property and make an offer. Once the offer is accepted, the lender starts the formal loan application process.
  • Appraisal: A lender orders an appraisal to determine the property’s market value. This step is crucial for ensuring the property’s value justifies the loan amount.
  • Final Loan Approval: After the appraisal and the value are confirmed, the lender finalizes the loan approval. The process moves forward if the appraisal meets or exceeds the loan amount. If the appraisal is lower than expected, the loan terms might need to be renegotiated.

Tips for Preparing for an Appraisal

Clean and Declutter

Start by thoroughly cleaning every room, including dusting, vacuuming, and scrubbing surfaces. Remove unnecessary items to make each space appear larger and more inviting. Pay special attention to key areas like the bathrooms and kitchens, as these are often appraisal focal points.

Why: A clean and tidy home makes a positive first impression and lets the appraiser see the property clearly without distractions. Clutter can obscure the home’s features and make spaces look smaller and less functional.

Follow the $500 Rule, Complete Minor Repairs

The home appraisal process doesn’t have a hard rule on how much a home’s price increases or decreases in value. However, appraisers often measure home value in $500 increments. If your home needs relatively minor repairs, they’ll hurt your appraisal. Fix or replace all non-functioning door latches or handles, torn window screens, and worn-out carpets. Also, make sure basic plumbing and light fixtures function correctly. While appraisers don’t thoroughly inspect plumbing, they’ll note if issues are found during their visit.

Why: Fixing small issues demonstrates that the home is well-maintained, which can positively influence the appraiser’s assessment. Neglected repairs can suggest underlying problems, reducing the home’s perceived value.

Enhance Your Curb Appeal

Mow the lawn, trim the bushes, clean the gutters, and power wash the exterior surfaces. Consider planting flowers or adding potted plants to make the entrance more inviting. Make sure to repair any visible damage on the exterior, such as cracked walkways or peeling paint.

Why: The home’s exterior is the first thing the appraiser sees and can set a good tone for the entire appraisal process. Good curb appeal reflects well on the overall upkeep of the property.

Document Home Improvements

Create a list of all significant home improvements, including dates and costs. This could include new appliances, updated flooring, remodeled bathrooms, or energy-efficient windows. Presenting this information to the appraiser can highlight the value these upgrades add to the home.

Why: A record of upgrades and improvements can help justify a higher appraisal value. It shows the appraiser that you have invested in maintaining and enhancing the property.

Highlight Your House’s Unique Features

Inform the appraiser of your home’s unique or desirable features, such as custom cabinetry, high-end fixtures, smart home technology, or special landscaping elements. Highlighting these features ensures they are considered in the appraisal.

Why: Unique features can set your home apart from others in the area, potentially increasing its value. Appraisers may not always notice these details without them being pointed out.

Provide Comparable Sales Data

Research and inform the appraiser about your area’s comparable home sales (comps). Look at homes similar to yours in terms of style, size, year, and condition. This can give the appraiser a clearer picture of the local market and how your home compares.

Why: Recent sales of similar homes in your neighborhood provide a benchmark for the appraiser. This data can support your desired appraisal value, especially if your home is on par with or better than recently sold properties.

Ensure Structural Integrity

Inspect and address any roof issues, ensuring there are no missing shingles or broken gutters. Inspect your home’s foundation, looking for cracks or signs of settling and making necessary repairs. Make sure the garage door operates smoothly and the space is clean and organized. Additionally, have your home systems—such as HVAC, plumbing, and electrical—professionally inspected and maintained. Demonstrating that these components are in good condition can reassure the appraiser of your home’s overall structural health.

Why: Your home’s structural condition is a major factor in its appraisal value. Ensuring your garage, roof, foundation, and home systems are in good shape can prevent significant value deductions.

Stage Your Home

Arrange your furniture to maximize the space and create an inviting atmosphere. Use neutral colors and decor to appeal to a broad range of tastes. Remove personal items and excess furniture to allow the appraiser to focus on the home’s features rather than the belongings.

Why:  Staging your home can make it appear more appealing and functional, positively influencing the appraisal. A well-staged home highlights its potential and helps the appraiser envision its full value.

Conclusion

Preparing for a home appraisal involves more than just tidying up. By taking these steps, you can ensure your home is presented in the best possible light, potentially increasing its appraised value. Clean and declutter, complete minor repairs, enhance curb appeal, document improvements, highlight unique features, provide comparable sales data, ensure structural integrity, stage your home, and understand the cost of a home appraisal. These tips will help you maximize your house’s value.

First Western Trust is an Equal Housing Lending, NMLS #477166

A Guide to Down Payment Assistance Loans

Posted on by First Western Trust Bank

For many aspiring homeowners, accumulating enough funds for a down payment on a house is a formidable challenge. However, down payment assistance programs can help bridge this financial gap, making homeownership more accessible and affordable. This guide delves into what down payment assistance entails, how these programs work, and the various types available, ensuring you are well-equipped to navigate this aspect of home buying.

What is Down Payment Assistance?

Down payment assistance (DPA) refers to programs available to prospective homebuyers that provide funds to help cover the cost of a down payment and, in some cases, closing costs. These programs aim to remove the financial barriers that prevent many from purchasing a home, promoting greater access to homeownership across economic backgrounds.

How Does Down Payment Assistance Work?

Down payment assistance programs can vary widely by state and locality, but they generally come in a few common forms:

  1. Grants: Grants are gifts that do not require repayment, provided the homeowner meets certain conditions, such as living in the home for a specified number of years.
  2. Low-Interest Loans: Some DPA programs offer secondary loans at low interest rates, which must be repaid over time. These loans can often be deferred until the home is sold or the primary mortgage is paid off.
  3. Forgivable Loans: Often structured to be forgiven over a set period of continuous residence, these loans may require no repayment if the homeowner stays in the home for the duration of the term, typically 5 to 15 years.
  4. Matched Savings Programs: These programs match the savings a homebuyer contributes towards their down payment, effectively doubling their available money.

Each type of assistance has its eligibility requirements, including income caps, credit score minimums, and homeowner education courses, to ensure buyers are prepared for the responsibilities of homeownership.

Different Types of Down Payment Assistance Programs

State and Local Programs

Most down payment assistance is administered at the state or local level. These programs can vary significantly per state, so it’s essential to research the offerings in your area and work with a professional who understands the local market. For example, some states offer generous grants to first-time homebuyers, while others might provide subsidized loans to low-income families. It’s important to contact local housing agencies or consult financial experts like those at First Western Trust Mortgage to understand the options available in your region.

Federal Programs

While most down payment assistance comes from state or local sources, federal programs also exist. For example, the Federal Housing Administration (FHA) offers loans that require lower down payments and are often used with state-run DPA programs.

Nonprofit and Charitable Organizations

Numerous nonprofit and charitable organizations provide down payment assistance to help specific demographics or economic groups. These programs may target veterans, first-time homebuyers, or those in particular professions such as education or healthcare.

How to Get Down Payment Assistance

The process to qualify for down payment assistance generally involves several steps:

  1. Homebuyer Education: Most programs require potential buyers to complete a homebuyer education course. These courses prepare you for the buying process, the responsibilities of homeownership, and the financial management necessary to maintain a home.
  2. Financial Qualification: You will likely need income, employment, and creditworthiness proof. Each program has its criteria for eligibility, focusing on factors like income level relative to the local median income, asset limits, and whether you’re a first-time homebuyer.
  3. Applying for Programs: Once you’ve identified the programs you might qualify for, the next step is to apply. This process can vary, so it’s important to follow the specific application requirements outlined by each program.

How First Western Trust Mortgage Can Help

First Western Trust Mortgage offers expertise in navigating the complex landscape of down payment assistance across all 50 states. No matter where you live, the First Western Trust Mortgage team has the experience and resources to guide you through obtaining down payment assistance. Their knowledgeable associates understand the nuances of state-specific programs and can provide tailored advice to help you maximize the benefits of these programs.

Final Thoughts

Down payment assistance can make the dream of homeownership a reality for many who would otherwise be unable to afford a home. By leveraging the support available through programs suited to your needs and location, and with the expert guidance of institutions like First Western Trust Mortgage, you can confidently navigate the path to owning your home.

NMLS #477166. First Western Trust is an Equal Housing Lender.

What is a USDA Loan?

Posted on by First Western Trust Bank

One often overlooked yet invaluable resource is the USDA loan program. Designed to help rural and suburban homebuyers who encounter obstacles with conventional financing, USDA loans provide an accessible route to affordable homeownership, boasting favorable terms and benefits. Learn about USDA loans, the various types available, the qualification process, and scenarios where they can be advantageous.

Understanding USDA Loans

A USDA loan, officially known as a Rural Development Guaranteed Housing Loan Program, is a mortgage program backed by the United States Department of Agriculture (USDA). Contrary to popular misconception, USDA loans are not exclusive to farmers or agricultural properties. Instead, they are designed to assist eligible borrowers in designated rural and suburban areas nationwide. These loans provide competitive interest rates, require no down payment, and offer favorable terms, making homeownership more accessible.

Types of USDA Loans

The USDA offers several types of loans to cater to the diverse needs of potential homebuyers:

  1. Loan Guarantees: USDA loan guarantees are provided by approved lenders, mitigating the risk of borrower default. This guarantee encourages lenders to extend financing to eligible buyers who may not meet the stringent requirements of conventional loans.
  2. Direct Loans: Direct USDA loans are issued directly by the USDA to low- and very-low-income borrowers. These loans feature subsidized interest rates, extended repayment terms, and flexible credit requirements, making them an invaluable resource for individuals with limited financial means.
  3. Home Improvement Loans and Grants: Besides financing home purchases, the USDA offers loans and grants for home repairs and improvements through its Single Family Housing Repair Loans & Grants program. This initiative aims to help homeowners maintain safe, sanitary, and energy-efficient living conditions in rural areas.

How to Qualify for a USDA Loan

Qualifying for a USDA loan requires meeting specific eligibility criteria, including:

  • Location Eligibility: The property must be in a designated rural or suburban area approved by the USDA. Borrowers can check the USDA’s eligibility map or consult with a qualified lender to determine property eligibility.
  • Income Limits: Borrowers must meet income requirements based on location and household size. Generally, applicants should not exceed 115% of the median household income for the area.
  • Creditworthiness: While USDA loans are more lenient than conventional loans, borrowers must still demonstrate sufficient creditworthiness and repayment ability to qualify.
  • Occupancy Requirement: The property financed with a USDA loan must be the borrower’s primary residence.

USDA Loans and Limitations

While USDA loans offer significant advantages for eligible homebuyers, it’s essential to be aware of their limitations and restrictions. Here are ways USDA loans cannot be used for:

  1. Investment Properties: USDA loans are intended for primary residences only. Borrowers cannot use these loans to finance investment properties or vacation homes. The property financed with a USDA loan must serve as the borrower’s primary residence for the foreseeable future.
  2. Luxury Properties: USDA loans have strict property eligibility criteria and cannot be used to finance luxury properties or homes that exceed certain value limits. The USDA sets maximum loan amounts based on the area’s median home prices, and properties exceeding these limits may not qualify for USDA financing.
  3. Business Ventures: USDA loans cannot be used to finance commercial properties or properties intended for business purposes. Borrowers cannot use these loans to start or expand businesses, purchase commercial real estate, or finance agricultural operations.
  4. Non-Permissible Repairs or Renovations: While USDA loans offer financing for home repairs and improvements through specific programs, there are limitations on the types of repairs and renovations that qualify. Cosmetic upgrades like luxury additions or swimming pools typically do not qualify for USDA loan funding.
  5. Debt Consolidation or Personal Expenses: USDA loans facilitate homeownership and related expenses, such as closing costs and necessary repairs. Borrowers cannot use USDA loan funds to consolidate debt, cover personal expenses, or finance non-housing-related purchases.

Understanding these limitations is crucial for borrowers considering USDA loans. While these loans offer significant benefits for eligible homebuyers, using them appropriately and by USDA guidelines is essential. By adhering to these restrictions, borrowers can make informed decisions and maximize the benefits of USDA loan programs for their homeownership journey.

Is a USDA Home Loan Right for You?

Determining whether a USDA home loan aligns with the needs of prospective homebuyers hinges on several factors. The lack of a down payment requirement renders USDA loans particularly appealing for those with restricted funds for a down payment. Additionally, individuals aspiring to homeownership in rural or suburban regions, where conventional financing options are scarce, find USDA loans to be an ideal solution. Moreover, given that USDA loans are tailored to accommodate low- and moderate-income borrowers, they offer accessible avenues for individuals who might not meet the criteria for conventional mortgages.

Scenarios Where a USDA Loan is Advantageous

  1. Limited Down Payment Funds: USDA loans are an excellent option for buyers who lack sufficient savings for a down payment, allowing them to purchase a home without upfront cash.
  2. Rural or Suburban Living: Individuals seeking to buy homes in rural or suburban areas where conventional financing options are scarce can benefit from USDA loan programs.
  3. Low to Moderate Income: USDA loans are specifically designed to assist low- and moderate-income borrowers, offering affordable homeownership to those facing financial challenges.

Conclusion

USDA loans represent a valuable resource for eligible homebuyers seeking homeownership in rural and suburban communities. With their competitive interest rates, no down payment requirement, and flexible eligibility criteria, USDA loans offer an accessible and affordable financing option for individuals from diverse backgrounds. We invite you to reach out to our team if you have any questions about USDA loans or other financial topics.

NMLS #477166. First Western Trust is an Equal Housing Lender.

Tips for Spring Home Buying Season

Posted on by First Western Trust Bank

As the weather warms up, many prospective homebuyers eagerly anticipate the arrival of spring, widely recognized as the peak of the home-buying season. If you’re among those considering purchasing a home, you’re likely wondering when exactly is the best time to start your search, what to look for, and how to navigate the process smoothly. As experienced mortgage lenders, here are valuable insights and tips to make the most of the spring home-buying season.

Understanding Home Buying Season

What exactly is the home-buying season? Home buying season refers to the time of the year when the real estate market experiences increased activity from buyers and sellers. While there isn’t a strict start and end date, traditionally, the spring months — March through June — are considered a favorable time for buying and selling homes in many regions.

Spring holds several advantages for homebuyers, making it a favored season for diving into the real estate market. Here’s why:

Optimal Weather: Spring brings milder temperatures and longer daylight hours, providing more comfortable conditions for attending open houses and conducting home inspections.

Abundance of Listings: Sellers tend to list their homes during spring to take advantage of the increased demand. This surge in inventory gives buyers a broader selection of properties to choose from.

Family-Friendly Timing: Many families prefer to move in the summer to avoid disrupting the school year. Therefore, purchasing a home in spring allows for a seamless transition before the new academic year begins.

Tips for Spring Home Buyers

Start The Home Buying Process Early

Starting your search early gives you a competitive edge in the bustling spring market. Begin by researching neighborhoods, browsing online listings, and attending open houses to get a feel for the market. Starting early gives you more time to explore different areas, refine your preferences, and make informed decisions.

Get Pre-Approved

Securing pre-approval for a mortgage is crucial before you start house hunting. This process involves submitting financial documentation to a lender, who then assesses your creditworthiness and determines the loan amount you qualify for. Pre-approval strengthens your bargaining power and streamlines the purchasing process by demonstrating to sellers that you’re a serious and capable buyer.

Define Your Priorities

To stay focused and avoid getting overwhelmed during your search, create a clear list of your priorities so you can easily evaluate if a home matches your needs. Consider location, commute time, school districts, number of bedrooms and bathrooms, yard size, and desired amenities. Rank your priorities based on their importance to ensure the homes you view align with your lifestyle and needs.

Ask the Right Questions

When touring potential homes, be bold about asking detailed questions to gather as much information as possible. Inquire about the age and condition of major components like the roof, HVAC system, electrical wiring, and plumbing. Additionally, ask about any past or ongoing maintenance issues, recent renovations, and the seller’s reason for listing the property. A solid understanding of these details will help you avoid unexpected and potentially costly surprises and make informed decisions.

Work with a Realtor

Having an experienced real estate agent that is reliable is essential to your home-buying success. Your agent should listen to your needs, guide you through each step of the transaction, work in your best interest, and provide advice when making an offer. They’ll help you navigate negotiations, interpret contract terms, and handle any challenges that arise, ensuring a smooth and successful home purchase.

Attend Open Houses Strategically

Attending open houses is an excellent way to familiarize yourself with the local housing market and gain firsthand experience touring different properties. Prioritize attending open houses for homes that align with your criteria and schedule multiple viewings on the same day to maximize your time. Take thorough notes, snap photos, and ask the listing agent clarifying questions to help you remember each property’s unique features and drawbacks.

Don’t Rush the Decision

While the spring market can move quickly, resisting the urge to rush into a decision is essential. Take the time to evaluate each property carefully, weighing the strengths and drawbacks against your priorities and budget. Consider resale potential, future maintenance costs, and neighborhood dynamics before making an offer. Finding the right home is worth the wait, so trust your instincts and exercise patience.

Be Flexible

Flexibility is key when navigating the spring housing market, as you may need to compromise on certain aspects of your ideal home to find the right fit. Keep an open mind and be willing to adjust your criteria based on market conditions, availability, and budget constraints. By remaining flexible, you’ll expand your options and increase your chances of finding a home that meets your needs and budget.

Stay Positive and Persistent

Finally, remember to stay positive and persistent, even if you face setbacks or rejection in a competitive market. The spring home-buying season can be challenging, but you will stand a better chance of finding the right home with patience and help from an experienced real estate agent. Trust in the process, stay focused and remain open to new opportunities that may arise along the way.

Find a Trusted Mortgage Lender

Securing a mortgage is critical to home buying, and finding the right lender can significantly impact your overall experience. Begin by researching reputable mortgage lenders who understand the local market, reading online reviews, and seeking recommendations from friends, family, or your real estate agent.

Conclusion

Navigating the spring home buying season requires careful planning, proactive decision-making, and strategic execution. From understanding the market dynamics and why spring is an ideal time to buy to implementing essential tips for success, prospective homebuyers can confidently embark on their journey toward homeownership. By starting early, defining priorities, working with reputable professionals, and staying flexible and persistent, you can confidently succeed in the competitive spring housing market. Whether you’re a first-time buyer or a seasoned homeowner, the spring home-buying season offers ample opportunities to find your dream home and make a sound investment in your future.

Adjustable-Rate Mortgages: The Popular Choice in the Mortgage Industry

Posted on by First Western Trust Bank

As the housing market continues to remain strong, more and more people are turning to adjustable rate mortgages (ARMs) as their preferred option for financing their homes. Despite other mortgage options seeing a decline, ARMs have experienced a surge in popularity over the past year. So why exactly are adjustable rate mortgages gaining favor among homebuyers? Let’s take a closer look.

What is an Adjustable Rate Mortgage?

An adjustable-rate mortgage, also known as a variable-rate mortgage, is a type of home loan where the interest rate can fluctuate over time based on market conditions. Unlike fixed-rate mortgages, which have a set interest rate for the entire duration of the loan, ARMs typically have an initial fixed period (usually 5-10 years) and then adjust annually based on an index. This means that borrowers can take advantage of lower interest rates if they occur, but they also run the risk of their payments increasing if rates rise.

The Appeal of ARMs

So why are more people choosing adjustable-rate mortgages over other mortgage options? One reason is the initial lower interest rates offered by ARMs. During the fixed period, the interest rate on an ARM can be significantly lower than that of a fixed-rate mortgage. This can lead to lower monthly payments and make homeownership more affordable for some buyers. Another reason for the popularity of ARMs is due to rising home prices. With housing prices increasing, homebuyers may be looking for ways to save money in order to afford their dream homes, making ARMs an attractive option.

The Risks of ARMs

While there are certainly benefits to choosing an adjustable-rate mortgage, it’s important for homebuyers to understand the risks involved. As mentioned earlier, the interest rate on an ARM can increase after the initial fixed period ends. This means that borrowers may end up paying more in interest over time if rates go up. Additionally, ARMs typically have caps on how much the interest rate can increase each year and over the life of the loan. However, these caps may not protect borrowers completely from significant increases in payments. It’s crucial for potential homeowners to carefully consider their financial situation and future plans before opting for an ARM.

First Western Trust Mortgage’s Perspective

As a leading provider of mortgage loans, First Western Trust has witnessed the rise in popularity of adjustable-rate mortgages firsthand. The company understands that every individual’s financial situation is unique and offers personalized guidance to help clients determine the best mortgage option for them.

In addition to ARMs, First Western Trust also offers fixed-rate mortgages, jumbo loans, and other financing solutions to meet the diverse needs of homebuyers. With over 15 years of experience in the industry and a team of knowledgeable professionals, First Western Trust is committed to helping clients achieve their homeownership goals.

Conclusion

The surge in popularity of adjustable rate mortgages in the past year can be attributed to various factors such as initial lower interest rates and rising home prices. While ARMs may provide some financial benefits, it’s important for homebuyers to carefully weigh the risks involved before making a decision. With personalized guidance and a range of mortgage options available, First Western Trust is dedicated to assisting individuals in achieving their homeownership dreams.

If you’re considering purchasing a new home or refinancing your current mortgage, make sure to consult with First Western Trust for expert advice and tailored solutions. Your dream home may be more attainable than you think with an adjustable-rate mortgage from First Western Trust.

What to Do After You Close on a Home

Posted on by First Western Trust Bank

As a proud new homeowner, it is essential to ensure the security of your property and compliance while transforming it based on your desired style. You could divide the things to do after closing a house into two categories: document management and housekeeping duties.

We highlight the main points of what to do after you close on a home for a smooth ownership transition.

Get Your Paperwork and Documents in Order

Taking over a new property requires close monitoring and management of legal documents, including ensuring statutory bodies have your correct address.

Update Your Driver’s License

It is important to check with your local and state authorities regarding driver’s license updates. Depending on your property location, you might have to retake your driving test or update the address on your license within a short time frame (around ten days in some states).

Inform Other Parties About The Address Change

After you close on a home, similarly to informing traffic authorities, it would be best to inform other parties of your new address. These include delivery services, credit card providers, and insurance providers. Updating these parties reduces the risks of failed deliveries and mail delays arising from an outdated address.

Keep Your Home Purchase Document Safe

After closing on a home, it is essential to keep every piece of official document safeguarded at all times. You should consider getting a printed and soft copy of each of the following documents for safekeeping upon closing a property sale:

  • Agent and purchase agreement
  • Title insurance policy
  • Home inspection reports
  • Promissory note
  • Closing Disclosure
  • Deed
  • Mortgage documents

For added protection, consider storing these documents in a reinforced safety deposit box to prevent theft and fire hazards.

Housekeeping Measures

A newly acquired property would present some housekeeping concerns, particularly homes in the resale market. The work or actions taken depends on the previous owner’s extent of property care and maintenance.

Enhance Your House’s Security

You should thoroughly assess the structural integrity of the gates and fences surrounding your property to reduce the risks of break-ins. Similarly, it is best to replace the locks of every door and window since it is difficult to ascertain who has entry to the property aside from previous residents. The same measures should apply to digital locks, where you should reset login details and remove registered biometrics if you intend to reuse the access panels.

Schedule an HVAC Cleaning

HVAC is a necessary aspect of household management. When purchasing a new home, you should ensure that the vents, pipes, and AC units are in optimal working condition. If needed, you should arrange for a site inspection by a trusted HVAC company for a thorough assessment. Doing so prevents emergencies in the hotter and colder months.

Refer to Your Home Inspection Report

A successfully closed housing sale entails a home inspection report that outlines the conditions and potential issues of the property. You could turn the report into a handy checklist to affirm that your new home meets the best security standards while optimizing its overall value. It is important to review every section of a home inspection report to schedule the needed house repairs without delay.

Particularly, you should review the summary page highlighting notable concerns, usually with relevant photographs for easy reference. For the most effective approach, consider ranking the highlighted items in terms of priority and resolve those issues in order of importance. A prioritized approach lets you quickly identify and fix the biggest property problems before they escalate.

Closing Thoughts

Purchasing a house through paperwork is merely the first step of owning a property. It is essential to conduct the necessary housekeeping and thorough document management for seamless ownership. Partnering with a dedicated mortgage specialist helps you organize every essential housing document while providing competitive packages for financing and investing in your home.

What Is The Best Time Of Year To Buy A House?

Posted on by First Western Trust Bank

The cornerstone of almost every American dream is homeownership. After all, owning a home allows you to create a place you can call your own. A home is more than a piece of real estate – it can become an extension of who you are as a person and family. From a financial perspective, homeownership is a cornerstone of planning and investing, as it allows you to build equity, enhance your credit, and purchase a significant financial asset.

A variety of factors go into homeownership and buying a home. There is also a key question that you have to ask yourself: When is the best time to buy a house? Is there even the best time of year to do so? 

The answer is complicated. 

Why Timing Might Matter: Direct Considerations

There are many reasons why the timing of home buying may impact your housing journey.

First, consider available inventory and how the available inventory may impact prices. The weather may matter depending on where you want to buy a home. People may be more willing to move in warmer or cooler weather than stifling heat or freezing snow. While the weather may make it more convenient for you to see houses, remember that this is the case for others. As a result, you may face more competition for available houses, which may drive prices up. 

Holiday travel can also impact home buying. After all, are people really selling homes during the holidays, when they want to spend time with their family, and when the weather may impact travel? This decline in people shopping often leads to lower prices, particularly for motivated sellers. 

This particular weather question leads to another: What about pent-up demand? Previous research has suggested that pent-up demand increases in the Spring. As a result, you may be in a bidding war, forced to pay higher prices that may impact your financial planning or force you to buy a less expensive house.

Conditions Related To Timing

Timing doesn’t just directly impact the home-buying process. Indeed, the time of year impacts a variety of factors that will, in turn, alter how easy it is for you to get a home. These include:

  • State of the economy: Cyclical economic cycles impact home buying trends. This may impact overall housing inventory and interest rates.
  • Your need for choice: Spring and summer tend to have higher levels of home inventory. As such, you may have more homes to choose from.  
  • City-specific factors: Some cities, like those in the south or the west, may be unbearably hot over the summer, meaning it can be very difficult to tour and buy a home during these periods. Of course, some areas of the country in the north or the east may be impassable due to snow, slowing things down over the Winter and potentially creating a better chance to buy.

What does all of this mean? Determining the best time to buy a house is about more than just the timing of the home-buying process. It is also about how the month or season may impact the economy. 

When is the Best Time To Buy a House?

Answering this question is complex. There is no question that local factors – including weather and specific housing market conditions – can make an impact. However, the best time to buy a house is typically late Fall and early Winter. Nicer weather – like that in May or June – can increase demand, which increases prices. Demand slows in the late Fall and Winter as the holiday season approaches, and the weather makes it harder to go out.

Furthermore, inventory is typically still available during this time of the year. As such, you may be better positioned to negotiate a better price or more favorable terms. You may also be able to close a deal faster: The reduced demand for real estate also means lower demands for related services, such as appraisal and inspection. As such, you may find yourself in a situation where you can pay less and close faster. 

That’s not to say there aren’t challenges: If bad weather is truly a problem in your area during this time, you’ll have to plan accordingly. This can particularly be the case for inspection, when ice and snow may cover roofs or make it harder to test certain systems, like air conditioning. 

Final Thoughts

Buying a house is complicated under the best circumstances, and determining the best time to buy a house can add a layer of difficulty to this process. If you ask yourself, “When is the best time to buy a house?” you’re already ahead of the pack, as you are clearly trying to determine how to save money and buy the best house possible.

What You Should Know As A First Time Home Buyer

Posted on by First Western Trust Bank

Buying your first home involves more than just purchasing a place to live; it’s a significant step toward long-term financial stability. While being a first-time homebuyer can be exciting, the process can also be overwhelming for many people. Here’s everything you need to know about the importance of buying a home, how to purchase a home that maximizes your chances of financial success, and other first-time home buying do’s and don’ts. 

Getting Ready For Buying A Home

Buying a home for the first time can be overwhelming. Here are our top tips to help smooth the process — from saving for your first home to getting ready for your move-in date.

  • Start saving now. Even the lowest down-payment programs require you to pay at least 3% of the home value, not including moving or closing costs. This amount may seem small, but saving for a down payment can be a long process, so it’s best to start early.
  • Get pre-approved. A pre-approval letter gives you a better idea of how much you can afford by pre-approving you for a specific loan amount. Getting this pre-approval can save you time and ensure you have realistic expectations as you begin house hunting.
  • Ensure your credit score is high enough. You’ll need a credit score above a certain threshold to qualify for a particular loan amount. If your score is too low, consider boosting it to position you for loan approval and enable reduced interest rates.
  • Inspect the neighborhood with an eye to the future. Review neighborhoods and nearby amenities and ensure the local area will meet your current and future needs.

Know Your Mortgage Types

In addition to preparing for purchasing a home, first-time buyers also need to understand the complexities behind taking out and paying a mortgage. Finding the right home loan is important, and there are many options, including loans that:

  • Come in various terms, including 15-year and 30-year loans.
  • Have variable or fixed interest rates, enabling you to judge the circumstances of the moment before taking out a loan.
  • Are based on your eligibility with a certain membership group, like being a veteran. Sometimes, you may also qualify for a reduced interest-rate loan based on where you live or your profession.

To select a loan that fits your needs, you’ll need to understand the difference between the types of loans available and identify the one that will get you the best results for your economic situation. 

Key Budgeting Tips For First-Time Homebuyers

Buying a home requires you to consider several key budgeting aspects. Understanding these principles will ensure you can continue to afford your home’s mortgage, taxes, and upkeep. Here’s what you should consider when budgeting for a new home:

  • It’s not just the mortgage. When calculating what you can afford, remember that your mortgage payment isn’t the only payment you will make. You will also have property taxes, homeowners insurance, and more. Furthermore, there will be moving costs and inevitable repair costs. As such, you need to budget conservatively. 
  • Don’t just take out the maximum loan. Just because you qualify for a loan doesn’t mean you should take out the entire amount you qualify for. Doing so may saddle you with more debt than you can manage, leaving you in a position where you may need to catch up on your payments.
  • Build that buffer. Conservative budgeting also means that you start saving even more. Yes, you need to save for a down payment. However, you also need to create a budget reserve for major or minor repairs in case of catastrophic damage to your home due to wear and tear or an accident.
  • Remember the tax advantages and other cost reduction techniques. It is entirely understandable to be worried about the costs of homeownership. However, you should also consider the tax advantages of owning a home. Mortgage interest, insurance premiums, and property tax payments can be written off, reducing your overall tax burden. Furthermore, some investments — like an alarm system — can reduce the price of your homeowner’s insurance. Consult with a tax professional to understand how homeownership may impact your tax situation positively. 

Get Professional Support When Buying Your First Home

Buying a home for the first time is a significant responsibility, and the economic considerations that must be made cannot be understated. By following the tips above, you will be well on your way to purchasing your dream home and positioning yourself for future financial success.

If you are looking for a home to buy, remember it’s about more than just finding an excellent neighborhood, good schools, and kitchen layout. Your home is essential for generating wealth and preparing for your long-term financial future. There are certain things to know when you buy your first home, and at First Western Trust, we’re here to help. We have knowledgeable staff who can help you find the right mortgage lender, structure your loan appropriately, and ensure you are ready to make this major purchase.

HELOC vs. Home Equity Loan: What is the Difference

Posted on by First Western Trust Bank

As a homeowner, you might find yourself in situations that require a large sum of money, such as kitchen remodeling or large-scale garage repairs. Cash-out refinance, which involves trading your current mortgage for a new mortgage and receiving the difference in cash, might not seem like the best choice due to the risk of higher interest rates and reduced equity.

In such cases, you have two loan options based on your home equity (the percentage of a property that you actually own by deducting the outstanding mortgage from the total value). These are home equity loans and home equity lines of credit (HELOC).

Choosing between the loan options depends on your spending habits and, ultimately, the purpose of the loan. By understanding the similarities and differences of each loan type, you can select the most stress-free option while fulfilling your financial commitments.

What is a Home Equity Loan?

Home equity loans are a type of installment usually repaid with fixed monthly payments over a fixed period of time. Most lenders usually offer loans of up to 85-90% of an individual’s home equity. Under home equity loans, you receive a lump sum of money upfront, which you can freely spend on your needs.

What is a HELOC?

HELOC is a revolving line of credit that functions similarly to a credit card limit. You can calculate the HELOC amount you may qualify for based on your property’s fair market values, outstanding home loans, and loan-to-value ratio limits.

You do not need to spend the entirety of the line of credit approved by your lender and only incur interest for the borrowed amount. The HELOC loan comprises two time frames: the draw and repayment period.

You can repeatedly borrow from a HELOC as long as you repay the previously loaned sum within the draw period, which usually lasts between five to ten years.

Once the draw period expires, you can no longer borrow from the line of credit as it enters the repayment period that extends between 10-20 years. During this time, you are required to make fully amortized repayment of the outstanding loan balance, which includes the principal sum and interest.

The Similarities Between HELOC and Home Equity Loans

HELOC and home equity loans are secured loans as they leverage home ownership stake or equity as collateral. Since secured loans provide lenders with collateral as added assurance, they often come with lower interest rates than unsecured personal loans.

By using the home as collateral, defaulting on loan repayment could result in property foreclosure. Both loans involve closing costs (often higher for home equity loans since they involve dispensing a lump sum of money), including loan application costs, attorney fees, and other miscellaneous charges.

Lenders of both loan types require a thorough assessment of a borrower’s credit score, equity, and debt-to-income ratio (lenders calculate this by dividing your fixed monthly debt over your monthly income). Similarly, lenders tend to provide a limit of 80-85% of a property’s appraised value while deducting the outstanding mortgage amount.

What’s The Difference Between HELOC And Home Equity Loans?

HELOC and home equity loans come with their own pros and cons, mainly in the cash out of the loaned funds and their repayment process.

HELOC – For the Flexibility in Spending

HELOC works best for you if you seek spending flexibility according to shifting financial demands and investments. For example, homeowners may tap on a HELOC’s revolving line of credit for managing each project’s varied renovations and remodeling costs.

A HELOC loan may provide a lower introductory rate compared to a home equity loan and borrowers are usually only required to pay the incurred interest during the draw period. However, the variable interest rates of HELOC could prove financially challenging in the long term, especially during high-interest markets.

Home Equity Loans – For Fixed-Rate Repayments

Home equity loans are most suited for you if you want to receive a fixed sum that you aim to pay off over an extended period of 15-20 years. Individuals who borrow home equity loans tend to have clarity of their borrowed spending, such as funding a home renovation or college education. With home equity loans, you can have peace of mind paying a fixed monthly amount without risking market-led interest fluctuations.

Closing Thoughts

Deciding between a HELOC or home equity loan comes down to your financial health and spending needs. While there is no limit to the number of home equity-leveraged loans you can apply for, each application reduces your total amount of available equity for qualifying for a loan.

NMLS #477166 | Equal Housing Lender

How to Buydown Your Mortgage Interest Rate

Posted on by First Western Trust Bank

In the current economic climate, rising interest rates are one of the most significant barriers to home buying. Current interest rates are higher than they have been in decades, putting major financial roadblocks in the way of individuals who want to buy a home.

Many potential solutions exist to help you get an affordable interest rate that would allow you to buy the home of your dreams. One such example is a mortgage rate buydown. Unsure of what a buydown mortgage is? Read on for more information and how this financial maneuver can help make your mortgage more affordable.

What is a Mortgage Rate Buydown?

Simply put, a mortgage rate buydown allows you to reduce the interest rate on your mortgage. You do this by paying extra points–also known as discount points—on your mortgage when you first take the loan out, meaning you pay more upfront. In doing so, you can reduce the interest you pay toward your mortgage, potentially allowing you to find massive savings over the length of your loan.

A mortgage rate buydown is more worth it in some situations than others. Individuals struggling to make a down payment may find that they do not have the money to buy down their mortgage interest rate, as they simply will not have achieved the savings necessary to purchase discount points. However, individuals who have achieved adequate savings may find this expense well worth it, as an investment in discount points can result in significant savings over the life of the loan.

These tools have been more used today than ever before. The reason is simple: Interest rates have risen significantly since the Fed began hiking rates to try and slow inflation. As of this writing, interest rates are higher than in roughly twenty years.

An Example of a Mortgage Buydown

Considering that one discount point costs 1% of the total loan amount, the overall expense for discount points is directly tied to the loan amount you decide to borrow. A discount point represents a prepaid interest fee, paid one time and upfront, which is deducted from your loan.
Consider the following example. Suppose you are taking out a loan on a $1,000,000 property. In this instance, the borrower may be willing to reduce your 30-year fixed mortgage loan by .25% for every point you purchase. Current interest rates are roughly 8%, and one point will cost you $10,000. As such, if you purchased four points, you’d pay $40,000, and your interest rate would decrease to 7%.

By lowering the interest rate, monthly mortgage payments will be more affordable during the specified time period. This can be particularly helpful if you anticipate financial constraints or are purchasing during a period of high-interest rates.

How Are Buydowns Structured?

There are actually multiple ways to buy down mortgages. The standard way is described above. In that example, flatly purchasing points will reduce a mortgage loan for its entire lifetime. However, there are additional ways.

For example, consider a 3-2-1 buydown mortgage. In this method, the seller, homebuilder, or lender will cover the cost of buying the points, enabling the homebuyer to reduce their interest rates. The rates will reduce by 3% in the first year, 2% in the second year, and 1% in the third year. In the fourth year, interest rates return to normal.


There is also a 2-1 buydown mortgage. This technique is a “lighter” form of the 3-2-1 buydown mortgage, as rates reduce by 2% in the first year and 1% in the second year.


3-2-1 and 2-1 buydown mortgages have become more popular today, as they can provide incentives for homebuyers who want to buy a home but may worry about current interest rates. In this method, an individual can reduce interest rates – even temporarily – before rates return to their full price. Furthermore, there is nothing that would stop an individual from refinancing their interest rate when the 3-2-1 or 2-1 mortgage expires. As such, it is possible that an individual would be able to take advantage of lower interest rates through refinancing. From the seller or lender side, 3-2-1 or 2-1 buydown mortgages can be an excellent incentive to close a sale, particularly during high-interest rates.

However, individuals who take advantage of either form of these buydowns must prepare for the spike in interest rates. They must also ensure they have the income to afford such a spike and thus work with a lender to plan their finances appropriately.

Final Thoughts

A mortgage rate buydown can be an excellent tool that allows an individual with a high net worth to reduce the interest rate they pay over the life of a mortgage loan. Alternatively, a 3-2-1 buydown mortgage or 2-1 buydown mortgage can be effective, but it requires appropriate planning for when interest rates rise again.