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Home Ownership

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HOME MAINTENANCE YOU SHOULD BE DOING MONTHLY

According to NerdWallet, nearly half of homeowners cite unexpected home repairs as a source of anxiety. And no wonder — surprise repairs can be costly, and they also seem to pop up at the worst possible time. Fortunately, there’s something you can do to reduce the chances of those kinds of repairs being necessary: Maintenance!

Home maintenance can be daunting for a new homeowner. The list may seem endless, but if you break tasks down into categories that can be easily scheduled, you can take some of the pressure off and make it easy to stay on top of home maintenance.

Some maintenance can happen weekly, while other maintenance is only necessary once a year! To get you started, here’s a checklist of the kinds of maintenance you should be performing monthly if you want your home to stay in good condition.

Clean your drains and disposal. Pouring boiling water down a drain is a quick way to clean out sludge. If the drain is still moving sluggishly, baking soda and vinegar can help break up obstructions. Tossing some ice cubes into your disposal will both sharpen the blades and help flush out debris.

Check vents and filters. Clogged-up filters and vents can increase utility costs, as well as present a safety hazard in some instances. You may not necessarily need to replace HVAC filters monthly but keeping an eye on them will help you spot when they do need to be changed.

Demineralize faucets. Faucets and showerheads can build up mineral deposits slowly or quickly depending on how hard your tap water is. Hard water buildup can reduce water flow and even cause faucets to spray water in all the wrong directions. Soaking the faucet filter in vinegar is a quick and easy way to remove mineral deposits.

Check up on safety devices. Your smoke detectors, carbon monoxide detector, and fire extinguisher can only save your life if they’re functional! Be sure to replace smoke alarm and CO2 detector batteries every year, and double check that your fire extinguisher is up-to-date.

Doesn’t sound so hard, does it? If you can work these into your monthly routine, you’ll save yourself a lot of trouble and expense in the long run. Once you’ve tackled those, you can start working on seasonal maintenance!

Financing a home purchase, or refinancing for a lower rate or improvements? Please text, email or call us... Have a great day!

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The Impact Staging Your Home Has on Sales Price

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Some Highlights:

  • The National Association of Realtors surveyed their members & released the findings of their Annual Profile of Home Staging.
  • 50% of staged homes saw a 1-10% increase in dollar value offers from buyers.
  • 77% of buyer’s agents said staging made it easier for buyers to visualize the home as their own.
  • The top rooms to stage in order to attract more buyers are the living room, master bedroom, kitchen, and dining room.

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Home Buying Myths Slayed

Some Highlights:   1) Interest rates are still below historic numbers.  2) 88% of property managers raised their rent in the last 12 months!  3) The credit score requirements for mortgage approval continue to fall.

Some Highlights:

1) Interest rates are still below historic numbers.

2) 88% of property managers raised their rent in the last 12 months!

3) The credit score requirements for mortgage approval continue to fall.

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Which Homes Have Appreciated the Most?

Home values have risen dramatically over the last twelve months. The latest Existing Home Sales Report from the National Association of Realtors puts the annual increase in the median existing-home price at 7.1%. CoreLogic, in their most recent Home Price Insights Report, reveals that national home prices have increased by 6.9% year-over-year.

The CoreLogic report broke down appreciation even further into four different price categories:

  1. Lower Priced Homes: priced at 75% or less of the median
  2. Low-to-Middle Priced Homes: priced between 75-100% of the median
  3. Middle-to-Moderate Priced Homes: priced between 100-125% of the median
  4. High Price Homes: priced greater than 125% of the median

Here is how each category did in 2016:

Bottom Line   The lower priced homes (which are more in demand) appreciated at greater rates than the homes at the upper ends of the spectrum

Bottom Line

The lower priced homes (which are more in demand) appreciated at greater rates than the homes at the upper ends of the spectrum

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Do You Know the Real Cost of Renting vs. Buying?

Some Highlights:  1) Historically, the choice between renting or buying a home has been a close decision.  2) Looking at the percentage of income needed to rent a median-priced home today (30%), vs. the percentage needed to buy a median-priced home (15%), the choice becomes obvious.  3) Every market is different. Before you renew your lease again, find out if you could use your housing costs to own a home of your own!

Some Highlights:

1) Historically, the choice between renting or buying a home has been a close decision.

2) Looking at the percentage of income needed to rent a median-priced home today (30%), vs. the percentage needed to buy a median-priced home (15%), the choice becomes obvious.

3) Every market is different. Before you renew your lease again, find out if you could use your housing costs to own a home of your own!

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5 Reasons to Love Using A RE Pro

Highlights:   Hiring a real estate professional to guide you through the process of buying a home or selling your house can be one of the best decisions you make!  They are there for you to help with paperwork, explaining the process, negotiations, and helping you with pricing (both when making an offer or setting the right price for your home).  One of the top reasons to hire a real estate professional is their understanding of your local market and how the conditions in your neighborhood will impact your experience.  If you would like to get connected with a great real estate agent, please fill out the form below. We work with many great agents all over California and would be happy to introduce you to one.

Highlights:

Hiring a real estate professional to guide you through the process of buying a home or selling your house can be one of the best decisions you make!

They are there for you to help with paperwork, explaining the process, negotiations, and helping you with pricing (both when making an offer or setting the right price for your home).

One of the top reasons to hire a real estate professional is their understanding of your local market and how the conditions in your neighborhood will impact your experience.

If you would like to get connected with a great real estate agent, please fill out the form below. We work with many great agents all over California and would be happy to introduce you to one.

Name *
Name

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2 Myths About Mortgages That May Be Holding Back Buyers

Fannie Mae’s “What do consumers know about the Mortgage Qualification Criteria?” Studyrevealed that Americans are misinformed about what is required to qualify for a mortgage when purchasing a home.

Myth #1: “I Need a 20% Down Payment”

Fannie Mae’s survey revealed that consumers overestimate the down payment funds needed to qualify for a home loan. According to the report, 76% of Americans either don’t know (40%) or are misinformed (36%) about the minimum down payment required.

Many believe that they need at least 20% down to buy their dream home. New programs actually let buyers put down as little as 3%.

Below are the results of a Digital Risk survey of Millennials who recently purchased a home.

As you can see, 64.2% were able to purchase their home by putting down less than 20%, with 43.8% putting down less than 10%!

Myth #2: “I need a 780 FICO Score or Higher to Buy”

The survey revealed that 59% of Americans either don’t know (54%) or are misinformed (5%) about what FICO score is necessary to qualify.

Many Americans believe a ‘good’ credit score is 780 or higher.

To help debunk this myth, let’s take a look at the latest Ellie Mae Origination Insight Report, which focuses on recently closed (approved) loans. As you can see below, 54.1% of approved mortgages had a credit score of 600-749.

Bottom Line

Whether buying your first home or moving up to your dream home, knowing your options will definitely make the mortgage process easier. Your dream home may already be within your reach.

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Whether You Rent or Buy, You’re Paying a Mortgage

There are some people that have not purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you are living with your parents rent free, you are paying a mortgage - either yours or your landlord’s.

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As The Joint Center for Housing Studies at Harvard University explains:

“Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return.  

That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”

Christina Boyle, a Senior Vice President, Head of Single-Family Sales & Relationship Management at Freddie Mac, explains another benefit of securing a mortgage vs. paying rent:

“With a 30-year fixed rate mortgage, you’ll have the certainty & stability of knowing what your mortgage payment will be for the next 30 years – unlike rents which will continue to rise over the next three decades.”

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As an owner, your mortgage payment is a form of ‘forced savings’ which allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee the landlord is the person with that equity.

Interest rates are still at historic lows, making it one of the best times to secure a mortgage and make a move into your dream home. Freddie Mac’s latest report shows that rates across the country were 3.43% last week.

Bottom Line

Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore, now may be the time to buy.

Get Pre-Approved

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Rents Skyrocket at Highest Rate in almost a Decade

The Consumer Price Index (CPI) was released by the Labor Department last week. An analysis by Market Watch revealed the cost of rent was 3.8% higher than a year ago for the second straight month in June. That’s the strongest yearly price gain since 2007.

This coincides with a report released earlier this month in which AxioMetricsannounced that rents are continuing to increase in 2016. The report revealed:

  • There was a 3.7% increase in effective rents in the second quarter of 2016 as compared to the same period last year.
  • That the effective rent growth this quarter compared to last quarter was 2.3%.
  • Annual effective rent growth was positive in 49 of the top 50 markets, based on number of units. Only Houston was negative, at -1.4%, as the fallout from energy-industry job losses and excess construction continues.

Here is a graph to illustrate the rate of increase over the last several years:

Bottom Line

With rents continuing to rise and mortgage interest rates still at historic lows, let's meet up today to determine if you could turn your monthly rental cost into a home of your own.

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Saving to Buy a Home? Do You Know the Difference Between Cost & Price?

As a seller, you will be most concerned with the ‘short term price’ – where home values are headed over the next six months. As a buyer, you must be concerned not with price but instead with the ‘long term cost’ of the home.

Many economists have pointed to Brexit (Britain’s exit from the European Union) as a reason that interest rates will remain low for the next few months. But Trulia’s Chief Economist Ralph McLaughlin warns that this will not always be the case in a recent post:

“While the departure of the UK from the European Union has driven down the 10-year bond, and thus mortgage rates, we expect them to rebound later in the year as uncertainty over the economic consequences of the departure lifts.”

The Mortgage Bankers Association (MBA), the National Association of Realtors (NAR) and Freddie Mac all project that mortgage interest rates will increase by close to a full percentage point over the next twelve months.

According to CoreLogic’s most recent Home Price Index Report, home prices will appreciate by 5.3% over the next 12 months.

What Does This Mean as a Buyer?

Here is a simple demonstration of what impact an interest rate increase would have on the mortgage payment of a home selling for approximately $250,000 today if home prices appreciate by the 5.3% predicted by CoreLogic over the next twelve months:

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Harvard: 5 Reasons Why Owning A Home Makes Sense Financially

We have reported many times that the American Dream of homeownership is alive and well. The personal reasons to own a home differ for each buyer, but there are many basic similarities.

Eric Belsky is the Managing Director of the Joint Center of Housing Studies (JCHS) at Harvard University. He authored a paper on homeownership titled - The Dream Lives On: The Future of Homeownership in America. In his paper, Belsky reveals five financial reasons why people should consider buying a home.

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Here are the five reasons, each followed by an excerpt from the study: 

1) Housing is typically the one leveraged investment available.

“Few households are interested in borrowing money to buy stocks and bonds and few lenders are willing to lend them the money. As a result, homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor. Even a hefty 20 percent down payment results in a leverage factor of five so that every percentage point rise in the value of the home is a 5 percent return on their equity. With many buyers putting 10 percent or less down, their leverage factor is 10 or more.”

2) You're paying for housing whether you own or rent.

“Homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord.” 

3) Owning is usually a form of “forced savings.”

“Since many people have trouble saving and have to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings to another day.”

4) There are substantial tax benefits to owning.

“Homeowners are able to deduct mortgage interest and property taxes from income...On top of all this, capital gains up to $250,000 are excluded from income for single filers and up to $500,000 for married couples if they sell their homes for a gain.”

5) Owning is a hedge against inflation.

“Housing costs and rents have tended over most time periods to go up at or higher than the rate of inflation, making owning an attractive proposition. 

Get Pre-Approved

Bottom Line

We realize that homeownership makes sense for many Americans for an assortment of social and family reasons. It also makes sense financially. If you are considering a purchase this year, let’s get together and evaluate your ability to do so.

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The Top Reasons Why Americans Buy Homes

Last week, the inaugural “Homebuyer Insights Report” was released by the Bank of America. The report revealed the reasons why consumers purchase homes and what their feelings are regarding homeownership.

Consumer Lending Executive, D. Steve Boland, explained:

“Homebuyers today are motivated by both emotional and practical reasons. Nearly all want more space, but a majority of homebuyers, especially those purchasing their first home, are also looking for a place to call their own, put down roots and make memories. They value the emotional benefits of owning a home as much as the financial ones.”

Boland went on to say:

“The path to homeownership is a journey and can be as overwhelming as it is exciting. For many people, this is the single most significant financial transaction they will ever make.”

This was evidenced in the report when they asked today’s homebuyers to define homeownership. Their answers tell the whole story.

Bottom Line

Homeownership has always been a part of the American Dream and survey after survey confirms this will always be the case.

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