How to Downsize

Is it time to downsize? There are many reasons for downsizing: financial, environmental, transitioning to an empty nester lifestyle, or simply a desire to simplify one’s life. Whether it’s a home post-retirement or a vacation home or even a home to create a simpler lifestyle, making the move from a larger home to a home with a smaller footprint will take some planning.

condoThe first step to downsizing is to take inventory of your things, as your possessions that currently fit into your larger home simply will not fit in your smaller home. There are dozens of resources which address this process, but deciding what to keep and what to get rid of is the most critical part of this process. Try the Kondo Marie method of focusing on what items you love and what items bring you joy. By process of elimination, the remaining items that do not, should be thrown away, sold or donated. An exciting part of downsizing is letting go of things that you don’t absolutely need, which helps you to focus on what is important.

Grouping like items together is another way to visualize what items you need to get rid of. For example, putting all of your baking and cooking items into groups can help you identify whether you have duplicates of items as well as items that you’ve never used at all. You may not have space in your new downsized home to house small kitchen appliances such as pasta makers or bread makers, especially considering these items may not be used sufficiently to justify taking up precious storage space.

Finally, map out your new space to determine where you are putting the items you are keeping in your new space. Larger furniture items may not be appropriate for the scale of your new home, so winnowing down the larger pieces to one or two favorite pieces will make the transition much easier. Recognize that storage will not be as plentiful for your smaller items, and this will drive your decision-making processes.

While your current large scale house may not be in your future, a home which provides more freedom (financial and otherwise) will be, and that’s something to look forward to! I’m happy to assist you with this major life decision.

Northeast Valley Map of Neighborhoods

Black Friday and the Mortgage Quiet Period

One of the biggest shopping days of the year is almost here AND you’ve also made the decision to purchase a home.  Deciding where you want to live, and what you want your home to look like are the fun part.  But, figuring out the technical aspects obtaining a mortgage is the not-so-fun part.   After you’ve gone through the loan process and have been approved for a loan, it’s easy sailing, and time to celebrate!  Not so fast . . .

Barnes & Noble store photoThe time between the original check of your credit which led to your loan being approved to the loan closing is called the mortgage quiet period.  This time is even more critical nowadays in this tighter economic climate, with loan writers being more vigilant about financial activities that may affect your original credit score.   From the loan writers’ point of view, financial activity during the quiet period in the mortgage origination process can sometimes be a warning sign of fraud, particularly when an unscrupulous borrower attempts to take out more than one loan on a property in a scam known as “shot gunning.”

Unfortunately, then, even if you’re not a borrower who has had issues in the past, ANY financial activities you undertake during this quiet period will be subject to scrutiny.  Borrowers who take on any type of installment debt may adversely affect their credit score at closing, as these debts will affect borrowers’ debt-to-income (DTI) ratio.  Therefore, signing up for a store credit card as part of a Black Friday promotional offer, or financing new furniture or a vacation on a credit card may jeopardize your pending loan.

Other actions subject to a red flag by the loan officer may include withdrawing cash from any accounts that were used to verify funds for the loans, or changing jobs may be considered signs of financial instability, and are strongly discouraged during the mortgage quiet period.  Even making large deposits into these same accounts could cause issues as lenders are required to source all funds in a transaction.  This means they need to prove the sale of items and verify financial gifts, which can delay the loan process significantly.

Bottom line, be sure to notify your loan officer if you need to make any changes to accounts or if you need to make a large purchase, so they can be properly documented, and the loan officer can be assured of your good faith.  I’m also available to answer any questions you may have about this process.  I look forward to working with you in your home search!

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