Monday, December 7, 2015

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Friday, December 4, 2015

4 Reasons 2016 Is The Year To Buy A Home

If you've been on the fence about buying a home, 2016 is the year to take the plunge.

Mortgage rates have been bouncing around record lows for a while now. But even though they're likely to start going up, you haven't missed your chance to get a deal on a house.

A number of factors are coming together, making next year a good time to buy:

1. Home prices will finally calm down Real estate values have been on the rise for a while, but are likely to slow their pace next year. Prices are expected to rise 3.5%, according to Zillow's Chief Economist Svenja Gudell.  Full Article

Buyers who've been stuck behind the wave of rising prices may finally get the chance to jump in.

And that could lead to a flood of buyers, said Jonathan Smoke, chief economist at Realtor.com. "We have the potential for about six million home sales just through the months of April through September; that is basically impossible to do," he said.

Despite the slowdown, Zillow still expects home values to outpace wage growth, which can make it tough to afford a home, especially for lower-income buyers. Plus, prices in the country's hottest markets -- like San Francisco, Boston and New York City -- aren't expected to pull back as much next year.

2. More homes will hit the market The slowdown in home prices will prompt more owners to list their homes, Smoke said, giving buyers more choice.

"Because of the price appreciation they have experienced, you will have more sellers put homes on the market next year," he said.

The new home market is also expected to grow in the coming year with builders focusing more on starter and middle-range homes, which will also boost inventory and make it easier for buyers. With more homes on the market, bidding wars will become less common and prices could ease even more.

3. Dirt cheap mortgages could disappear The Federal Reserve is widely expected to begin increasing interest rates soon, which means the window for record low mortgage rates is closing. While rates are expected to go up gradually, higher rates push up borrowing costs and monthly mortgage payments. "You are likely to get the best rate you will possibly see, perhaps in your lifetimes through the majority of next year, but certainly, the earlier the better," said Smoke.

4. Rents will still hurt Rent prices are expected to continue to climb in the new year, which means in most cities, buying will be cheaper than renting. Even though mortgages could get more expensive, buying might still be the better deal. Interest rates would need to rise to around 6.5% for the cost of buying to equal that of renting on a national level, according to Ralph McLaughlin, housing economist at Trulia.


Wednesday, December 2, 2015

How Do Homeowners Accumulate Wealth

The differences between buying and renting are massive.  According to the Federal Reserve, a typical homeowner’s net worth was $195,400, while that of renter’s was $5,400.  The data reflects 2013 and the next survey of household finances, which is conducted every three years, will be out in 2016.  Based on what has happened since 2013 and projecting a conservative assumption of what could happen next year to home prices if we see only 3% price growth, the wealth gap between homeowners and renters will widen even further. The Fed is likely to show a figure of $225,000 to $230,000 in median net worth for homeowners in 2016 and around $5,000 for renters. That is, a typical homeowner will be ahead of a typical renter by a multiple of 45 on a lifetime financial achievement scale.  Full Article

Though there will always be discussion about whether to buy or rent, or whether the stock market offers a bigger return than real estate, the reality is that homeowners steadily build wealth.  The simplest math shouldn’t be overlooked. A vast majority of homebuyers take out a 30-year fixed rate mortgage to make a home purchase. After 30 years, there is no mortgage payment (nor rent payment). So the home price growth over that time period would be the equity that the homebuyer would have accumulated. For example, the median home price of a single-family dwelling in the U.S. thirty years ago in 1985 was $75,500. This year, it will be at least $220,000. That figure of $220,000 is the housing component of the person’s wealth. Even had home prices not risen, the person would still have $75,500 in wealth today – on top of not paying any further monthly mortgage after 30 years.

This simple example does not play out nearly as neatly in the real world, since people do not stay in one residence over the 30 year period. Almost all homeowners trade up, change neighborhoods, or move to a better school district at some point. However, they are able to make those residential relocations due to the housing equity accumulated, even over a shorter period, and can immediately apply that equity to the next home as a downpayment. Therefore the conditions of steadily building housing wealth still hold.

We also know that not everyone can or should be homeowners. The memories of easily accessible subprime mortgages and subsequent harsh foreclosure pains are still fresh, and remind us of the devastating impact on the families involved, local communities, and to the broad economy. In addition most young adults have not developed the financial standing or have found a stable, desirable career and, therefore, choose not be homeowners until later.  The homeownership rate among households under the age of 35 is 35% currently and rarely rises above 40% historically. For those under the age of 25, the current ownership rate is 23% and rarely rises above 25%. But the time will eventually come when people want to convert to ownership. By the time people are in their prime-earning years of 45-to-55, nearly three-fourths do eventually become homeowners. By retirement, nearly 80% are homeowners.

A recent survey of consumers commissioned by my organization revealed that 80% believe that purchasing a home is a good financial decision (2015 National Housing Pulse Survey). Most consumers appear to already understand the simple math and the benefits of homeownership. So don’t overthink the matter of whether now is a good time to buy, or whether stock market returns will be better. The exact timing of a home purchase will have little financial impact in the big scheme of things. Just know that homeowners generally do come out ahead of renters in the long run.


Monday, November 30, 2015

Easy Steps To Help Build Your Credit

If you’re considering buying a home next year, it’s never too early to be thinking about your credit, according to Danny Gardner of Freddie Mac. Whether you’re hoping to buy a home in spring 2016 or looking further out, this article offers some simple steps you can take between now and then to help build and maintain good credit.  Full Article

Having good credit is no accident. It’s the result of discipline and planning. Start today, and by the time you’re ready to become a homeowner, your good credit will pay off with better loan terms, lower interest rates, and greater financial opportunities in the future.

A good credit history increases the confidence of lenders and creditors when they loan money to you. When they see that you’ve paid back your loans as agreed, lenders are more likely to extend credit again. With good credit, you can borrow for major expenses – like a home – and you can borrow money at a lower cost, ultimately saving you money.

Your FICO credit score is one tool lenders use to gauge your creditworthiness. FICO scores can range from about 300 to 850 points – and your goal is to aim high. How high?  Well, to give you an idea how much having good credit matters, in the third quarter of 2015, the average borrower of a loan bought by Freddie Mac had a FICO score of 751. That represents a slight drop since the peak of the housing crisis, but still means we’re in a lending environment where having a good credit score is incredibly important. Here are some steps you can take.

Open a checking and savings account. When you open a checking and savings account, try to stay above your minimum balance, never bounce checks, and make regular deposits.

Use credit cards carefully. Credit cards are convenient and easy to use, but using them recklessly can hurt your credit. If you allow your credit cards to reach high, unpaid balances, they can cost you hundreds or thousands of dollars in interest alone. On the other hand, if you pay them in full and on time each month, credit cards can help you build excellent credit and reap the benefits that follow.

Establish credit independently. It’s important for both partners in a marriage or a relationship to establish their own credit to help achieve financial goals and to protect against unforeseen circumstances like death, divorce, or other life changes. Partners should regularly discuss household and personal expenditures to ensure that neither has an excessive amount of charges that cannot be repaid.

Honor your promise to pay. It’s essential that you honor your promise to make your credit payments on time and in the amounts scheduled. That includes your credit cards, auto and student loans, utility bills, medical bills, etc. Contact your lender or creditor immediately if you are having trouble making payments.

Know what's in your credit report. Check your credit report at least once each year at www.annualcreditreport.com to ensure its accuracy (Federal law requires that the three consumer credit reporting companies give you a free credit report annually – you just have to ask for it). If you’re planning a large purchase, check your credit report before it’s time to buy to avoid any surprises and to allow you plenty of time to correct any errors.

Take steps to restore your credit if you've had a financial setback. Contact former creditors with whom you've had a good payment record – they may be willing to help you re-establish your credit. You don't want to acquire too many credit cards, so carefully review any credit card offers you receive. And above all, avoid disreputable credit "repair" companies that promise a quick and easy fix – they could end up costing you money and dragging you further into debt. Instead, take advantage of the services provided by a local Consumer Credit Counseling Service or a HUD-approved Housing Counseling Agency.


Wednesday, November 25, 2015

That's Why My Home Didn't Sell

Many homeowners often have no idea why their home isn’t selling and then when their listing eventually expires they ask themselves; why didn’t my home sell? What was I missing? For the experienced, trusted Real Estate professional it’s easy to know why a home doesn’t sell, yet unfortunately when a homeowner chooses the wrong Real Estate Agent to sell their home, they only learn through trial and error. Full Article

What are the most common reasons that homes don’t sell?

1. Wrong List Price   A proven pricing method that entails reviewing recent closed sales and pending sales, typically within a 3 month, sometimes 6 month period, by comparing similar homes within a nearby radius of your home and then making any plus/minus adjustments for such things as updates, features, condition and location and how they compare to your home, a fair market value can be determined. Then they will also look at homes currently active for sale, your competition, to determine at what ideal price point should your home be placed to get your home sold.

When you list your home for sale above market value, you are missing a whole pool of Buyers well qualified to buy your home; these Buyers aren’t even looking at your home because they’re looking at your true competition where your home should be priced. With your home being priced above market value, your home is being overlooked as the Buyers in this price range where your home is priced are able to find homes priced right in this price range that will be larger with better features. So again, you’re missing Buyers. As time goes by, you agree to a price reduction, yet now your home has lost it’s fresh appeal as is present when a home first hits the market for sale. As your home lingers, it has become almost tainted as Buyers wonder why your home hasn’t sold. Tainted homes can be seen as fire sales. Offers may now come, but they can likely be at discounted prices. You don’t want to accept such a low offer, so you reject the offer and your home sits and doesn’t sell.

2. No home selling preparation  There aren’t any shortcuts when it comes to selling a home. It takes time and effort to prepare a home for sale. Preparation will almost always result in your home being sold for the most money. Such things as, cleaning, decluttering, making minor repairs or major repairs/updates when the budget allows, sets the stage for your home to be revealed in its most favorable light. If your Real Estate Agent didn’t advise you on what to do to prepare your home for sale, this can be a huge factor in why your home didn’t sell. How much preparation did you do in getting your home ready? What did your Agent recommend? “Nothing”, you say. I was afraid you’d say that.

3. Ghastly photos and/or few photos  I can’t even tell you the number of times that I’ve come across a home for sale where the photos are simply ghastly! The photos reveal dark and dingy rooms. People and pets in photos, toilet lids up, clutter and mess everywhere. I’ll also see homes that have just a few photos for prospective Buyers to see. Buyers want to see photos, lots of photos and high quality photos otherwise, they’ll skip right over your home. Did your Real Estate Agent show you your home’s online marketing presentation where photos are displayed? “No”, you answer. That’s what I thought. Most homeowners aren’t even aware of how poorly their home is being presented over the internet otherwise, they would have fired their Agent.

4. Your home wasn’t splashed in front of prospective Buyers  92% of Buyers search for homes for sale over the internet and if your home wasn’t marketed by being splashed across the internet, your home will be missed being seen by prospective Buyers. The Agent you hired should have a strong online internet marketing presence. They should know how to market themselves well, in order to market your home for sale. Try Googling their name to see what comes up? You should see pages of their presence. If they can’t market themselves how will they every market your home for sale? If they have a strong online presence this means that your home will be seen by more prospective Buyers simply by them being splashed all over the internet. In essence, you’ll be using their strong Real Estate brand to attach your listing to and be seen; it can be very powerful. Do you know if your home was marketed well? I hate to hear your answer, yet I’m sure I know the answer by now.

5. You didn’t believe in being harmonious  When there are so many parties to a Real Estate transaction it’s important to be harmonious as possible. This doesn’t mean that you have to agree to every demand, it simply means that you need to communicate well and understand that there will be a little give and take. When your Real Estate Agent calls, emails or texts you, it’s important to respond in a timely manner; the contact could likely have a contractual deadline attached to it. When you request something of the Buyer and they agree, remember this when they request something of you. There should be balance and not everything your way or the highway. If this is your style, it’s best to bottle it while selling your home and feel free to let it out after you sold your home. I certainly can’t tell you how to live your life, but only guide you during the selling of your home to meet your objective of selling your home for top dollar in the shortest amount of time.

Knowing these 5, all too common, reasons that are experienced by home Sellers when their home’s do not sell can educate you for the next time you sell your home. Or if you’re thinking about selling your home, these reasons discussed here can provide you with valuable insight before you embark on selling your home.


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Monday, November 23, 2015

The Down Payment Quandary: Trying to Save 20 Percent

After the down payment hurdle is cleared, mortgage payments tend to be lower than rent. Full Article

The crimp that high rents are putting in people’s budgets has a direct impact on how able they are to save for a down payment.  Rising home prices compound the problem, requiring an even larger heap of cash to reach the 20 percent mark, the amount typically required to avoid mortgage insurance.

People used to get there with second jobs, but lenders don’t see this as much since the recession.

“Instead, what you see is somebody graduates from college, they move back home to pay off debt and save money, and they work 50, 60 hours a week at the job that they found,” said Staci Titsworth, a regional manager for PNC Mortgage in Pittsburgh.

There are also more double-income households, and more first-time buyers waiting to buy homes where they can stay more than 5 years and possibly raise families, she said.

People are also coming in below 20 percent, which typically requires paying mortgage insurance.

Even with mortgage insurance tacked on, people tend to have lower monthly payments for mortgages than for rent. Indeed, homeowners in general can expect to spend about 15 percent of their monthly income on mortgage payments (without mortgage insurance) for a median-valued home, while renters can expect to spend 30 percent on rent.

Borrowers in pricey markets have taken the lower down payment route for years.

That’s how Sara Clarke, an editor at U.S. News & World Report, and her husband landed their first home: a townhouse in Alexandria, VA, that cost $299,500. They put down 5 percent, money saved from a childhood paper route and fast-food jobs, plus a little help from a relative.

By the time they sold it about 10 years later, they had accrued the 20 percent down payment they needed for a single-family home in Fairfax County. They even had money left over to replenish a savings account depleted by upgrades on their first kitchen, bathrooms, roof and “redoing everything we could redo.”

Assistance from parents remains a common way to get a foot in the door of your own home. Loans and gifts from family and friends rose from 8 percent to 21 percent during the recession, and was down to 13 percent last year.

JPMorgan Chase has also seen first-time buyers becoming more disciplined about spending and tapping into 401(k)s, said Sean Grzebin, the bank’s head of retail mortgage lending.


Thursday, November 19, 2015

Wanna beat the home buying crowds? Winter is the time

Now that the U.S. has regained its job-creation mojo, as the October employment report showed, the demand for housing is only going to grow.  Full Article

After all, when people have jobs they can break off and form new households—ditching the roommates behind or finally moving out of Mom and Dad’s basement—and that’s what fundamentally drives home purchases.

Most of the households created over the past two years have been renting households, but based on U.S. Census data for the third quarter of this year, it appears that homeownership has started to recover.

This especially makes sense now that it is cheaper to own than rent in more than three-quarters of the counties in the U.S. And it’s not getting better— rents are rising year over year at twice the pace of listing prices. Meanwhile, mortgage rates remain at near record lows but appear poised to increase over the next year. And home prices are rising, too.  So if you qualify for a mortgage and have the funds for a down payment and closing costs—and if you intend to live in a home long enough to cover the transaction costs of buying and selling—you will be better off financially if you buy as soon as you can. After all, if you are tired of your current home now, you won’t feel better about it in six months.

The top factors driving home shoppers this summer were pent-up demand and recognition of favorable mortgage rates and home prices. These drivers will likely remain well into next year.

Yet demand for housing is extremely seasonal. In most markets in the country, we are conditioned to believe that we should buy homes in the spring and summer. So come each October, plans to purchase shift to the spring. While the school calendar and weather do influence the ideal time to move, many buyers would benefit from buying this fall and winter rather than waiting until next spring.


Wednesday, November 18, 2015

The 7 Steps to Buying a Home

You’ve finally found the home you love. Now what? Though every market is different, you can expect to follow these seven steps, from offer to closing. Full Article

1. Making an offer  If you’re sure the home you love is right for you, it’s time to make your move. This means writing up a formal purchase offer and signing a real estate contract.  Even though it’s early in the buying process, you still must sign a legally binding contract. With your signature, you’re committing to moving ahead with the seller. Keep in mind you can add contingencies to many real estate contracts. For example, most real estate buying offers will be contingent on a property inspection, as well as disclosure review, loan approval, appraisal and other matters. Such contingencies enable buyers to opt out of the contract if unexpected problems or concerns pop up.

2. Disclosures  In most states, sellers are legally required to provide buyers with disclosure documents, a preliminary title report, copies of city reports and any specific local documents. In California, for example, an earthquake hazards report or a geological survey is required as part of the disclosures. In some areas of the South, especially near the Gulf Coast, buyers usually receive flood maps and reports relevant to the property being considered.  In addition, sellers must disclose any known issues that might affect the property’s value or habitability. Usually, in a transfer disclosure statement, sellers must answer a series of “yes” or “no” questions about the property, the neighborhood and their experience there. If there have been leaky windows, violations from the city, work done without permits or plans for a major nearby development, the seller must disclose them. If there are significant issues, the seller’s agent would likely have brought them up before the contract signing. But if something is disclosed here that is a negative factor for you, it is your “out” of the contract.

3. The appraisal  Most buyers put a certain amount of money down toward the purchase price. The balance will come in the form of a bank loan (usually). But a bank isn’t going to hand over that money without due diligence. An appraisal is the financial institution’s way of making sure the contract price is the right price. So the lender sends out a third-party appraiser, which the buyer pays for, to confirm that the contract price is in line with the neighborhood’s comparable sales. If it’s not, the bank can deny the loan or change the terms.

4. Inspections  As part of the real estate contract, you have the right to a property inspection. The most common is a “general” property inspection, in which the inspector checks the home from the foundation to the roof and investigates all major systems and components. As the buyer, you should follow along with the inspector to learn more about the property. For example, you’ll want to know about the components (such as the water heater) and have a plan in place for maintenance.  After the general property inspection, the inspector may suggest having a specialist come out. This could be a roofer, electrician, HVAC specialist or even an engineer. Listen to the inspector and have any recommended follow-up inspections. Remember: This is your one chance to approve the property from top to bottom. If issues arise, you may be able to negotiate a fix or credit with the seller. If something major arises and it’s not what you signed up for, you can exit the contract via your inspection contingency.

5. Loan approval or commitment  In addition to making certain the property appraises at no less than the contract price, the bank will want to fully approve your credit, debt and income history. The bank will also want to approve the property’s preliminary title report to make sure there are no liens recorded against the property that might affect its value. The bank can take up to 30 days to complete its review, which should result in a loan commitment or full loan approval. Once that’s completed to the bank’s satisfaction, you’re guaranteed a loan, and you’re one step closer to closing.

6. Final walk-through  Just before closing, you should walk back through the property to make sure it’s in the condition it was when you last saw it. Make sure the seller didn’t remove any fixtures, make modifications or leave behind garbage or debris. You also want to be sure any fixes you negotiated with the seller have been completed.

7. The closing  Depending on the market, the closing may happen at an attorney’s office or with an escrow officer at a title company. In some jurisdictions, the buyer and seller don’t ever meet. Each goes in to sign their closing papers separately. In others, the buyers and sellers sign the closing documents together. Also, thanks to current technologies, some closings can now happen remotely using wire transfers and overnight delivery of documents.

Regardless of how a closing happens, if you’re a buyer and getting a loan, plan on signing dozens of documents at closing. You’ll need to show photo ID, as your signature will be notarized. Prior to the closing, your real estate agent, attorney or escrow officer should send over a closing statement to review. The statement details your final closing costs and the money you need to bring to the closing. The funds can be wired in or paid with a cashier’s check on closing day. Be sure to ask for the statement early, so there aren’t any last-minute surprises.


Monday, November 16, 2015

Why Real Estate Must Adapt to Fast-Changing Technology

The technology sector, which tends to advance rapidly in game-changing shifts, has long provided a glaring contrast to the real estate industry, which is based on long-lived assets and evolves slowly. Full Article

But that dichotomy will soon fade, according to a panel of real estate and tech leaders at ULI’s Fall Meeting in San Francisco. Along with the rest of society, real estate inevitably will be transformed by the ascendance of e-commerce, innovations such as driverless vehicles, and the rise of a new, sharing-oriented economy in which players collaborate to improve efficiency, panelists said.

The industry needs to alter its business model in order to serve tenants whose needs are different than they were in the past, said Patrick L. Phillips, ULI global chief executive officer, who led the discussion. Real estate executives need to develop more flexible leasing arrangements, which would enable companies to scale up and down to adjust to market changes, he said. The industry also needs to look at building more flexibility into building design and land use. And given the rise of collaborative relationships in the digital economy, real estate developers should look at developing closer relationships with tenants—possibly by becoming equity partners in their businesses.


Friday, November 13, 2015

Money Back Guarantee

We are confident that our home selling services are effective, which is why we offer our money back guarantee program.

How it Works

1. If you are having trouble selling your property call us for recommendations on how to improve your chances.

2. If we confirm that working with a full service real estate agent is your next move, then we will connect you with a Top Producing broker/agent in your area. If you are not satisfied with the broker/agent we selected, we will help you find another one.

3. Once your property has successfully sold using the agent we have recommended, send us the HUD statement and/or closing documents and Savvy Lane will refund the flat listing fee that you have paid.

Doing An Annual Financial Checkup Can Help You Save

If there's one lesson from this year's wild ride on Wall Street, it's this: Stuff happens, and it's better to have a plan in place before unexpected events turn your financial life upside down.  Full Article

Thanksgiving is right around the corner and the hectic holiday season is coming soon, so there's no better time to get your money matters in order and nail down a 2016 game plan.

Here's a checklist of what your annual financial checkup should include:

1. Do a "risk tolerance" profile. Were you a basket case when the stock market cratered this summer, suffering its first 10%-plus drop in four years? If so, your portfolio might be too risky for you. The fix: "Perform a personal stress test to determine if you can stomach, say, a 25% loss in your portfolio," McMahon says.

2. Rebalance your portfolio. Is your mix of stocks, bonds and cash out of whack? Now's the time to make sure you have the proper helpings of stocks and other financial assets, says Nancy Coutu, co-founder of Money Managers Financial Group, a financial planning firm based in Oak Brook, Ill. The fix: "Rebalance and get back to your allocation," Coutu says.

3. Conduct a "debt inventory." If you owe too much money, map out a plan to pay down debt. "Debt can creep up on you," McMahon says. The fix: "Develop a debt elimination strategy," he says.

4. Bolster retirement savings. Nurture your nest egg, Coutu advises. The fix: Take advantage of a Roth individual retirement account, she says. Roth IRAs, while funded with post-tax income, don't tax gains. Coutu's recommendation: Fund your 401(k) first, but only up to the amount needed to get all of your company's match. Next, fund your Roth IRA. If any funds are still available to save, direct those dollars into your 401(k), which is funded with pre-tax income but is subject to taxes on gains. "Most savers contribute the maximum to their 401(k)s and forget to contribute to Roth IRAs," Coutu says.

5. Grade your kid's college fund. Buying and forgetting 529 college investment savings plans isn't an A+ strategy, McMahon says. Why? If your kid is within a year or two of college and the 529 plan is 100% in stocks, a market downturn could erase savings at precisely the wrong time. The fix: "Check how 529s are invested and whether it's appropriate," McMahon says. If the 529 plan is too stock heavy, pare risk back by shifting to more cash and bonds.

(Photo: iStockphoto)

Thursday, November 12, 2015

US home values and rents steadily rising in a resilient housing market

Home values and rental prices are steadily rising, fueled by strong demand and a tight supply of available properties, a pair of reports Tuesday showed. The solid demand drove sales growth early this year and spurred additional construction.  Full Article

In September, median rents nationwide rose a seasonally adjusted 3.7 percent from a year ago, according to real estate data firm Zillow. As with home prices, the pace of rent increases appears more stable than the sharper increases earlier this year.

Still, while three years of solid hiring and low mortgage rates have bolstered real estate, further gains will likely require better pay for workers. Increases in home values continue to exceed average annual earnings, which have risen just 2.2 percent from a year ago.

For now, homes in tech hubs with a high concentration of good-paying jobs appear to be the main beneficiaries of rising prices. S&P reported that San Francisco and Denver both enjoyed a 10.7 percent year-over-year jump in home values, the largest of any city. Portland, Oregon's annual gain of 9.4 percent was the third-largest.

Those same metro areas were among the leaders in the rental increases tracked by Zillow. At the same time, those high rental prices sparked some new construction, which has created more apartments and tempered the rental-price appreciation in recent months.

The median rent in San Francisco was $3,348 last month, a yearly increase of 13.3 percent. The year-over-year increase in August was even higher — 14.2 percent.

The housing market's overall gains are defying the impact of a sluggish global economy. Falling commodity prices, weakened growth in China, a struggling Europe and tumult in emerging economies such as Brazil have hampered a world that is still battling its way out of the 2008 financial crisis.

Not every area of the United States is benefiting. Rental price growth has slowed in areas at the epicenter of the oil and natural gas industry, according to Zillow. Average oil prices have nearly halved in the past year to $44 a barrel. Houston's rental costs are up 5.8 percent over the past 12 months, down from annual growth above 6 percent. Price appreciation has also slipped in Dallas and Tulsa.

Overall in the United States, the housing sector has expanded for much of 2015. Sales of existing homes jumped 4.7 percent in September to a seasonally adjusted annual rate of 5.55 million, the National Association of Realtors said last week.

The pace of home construction rose in September and is up 12 percent so far this year compared with 2014. But the bulk of the growth has been fueled by condominiums and apartment buildings. Single-family-home construction — the heart of the housing market — was flat in September.

That reflects a greater preference for renting rather than home-buying since the Great Recession, which has reduced the percentage of Americans who own homes to nearly a 48-year low of 63.7 percent.

Home values are rising largely because few properties are being listed for sale. The number of existing homes for sale has fallen 3.1 percent in the past 12 months. In September, the number of available homes was equal to just 4.8 months' of sales, below the six months' supply that is typical of a balanced market.


Wednesday, November 11, 2015

Veterans Day

On this Veterans Day, let us remember the service of our veterans, and let us renew our national promise to fulfill our sacred obligations to our veterans and their families who have sacrificed so much so that we can live free. - Dan Lipinski


Top 10 Reasons to List Flat Fee

1. Commission Savvy Lane is a Flat Fee MLS Real Estate Brokerage and does not collect the customary 3% listing commission. Pay a ONE TIME flat fee to get your home on the MLS for local and national internet exposure to all buyers and agents. Our discount MLS listing service and our discount real estate service will save homeowners thousands in real estate commissions.  

2. Customer Service We answer our phones and emails promptly, no phone maze! Our professional, licensed staff is ready to answer any real estate questions to make selling your own home easy. We have worked with traditional home sellers and For Sale by Owner sellers (FSBO) for many years. We have a great reputation of being helpful and informative read the Testimonials from our past clients. See our helpful pages on pricing your home, home selling tips, open house tips, or please call with any questions regarding our discount real estate service. Our customer service hours are Monday-Friday 9 am-6 pm, Saturday- Sunday 9-5

3. Internet Exposure Our internet exposure is not limited by price. Listing with Savvy Lane, a leading Flat Fee MLS Real Estate Brokerage, will give all sellers Local and National internet exposure by utilizing the MLS and other major Real Estate sites. Don’t settle with other FSBO listing sites or flat fee brokerages that limit the exposure based on price. All our listings will be displayed on the local MLS, REALTOR.com, and many more...  

4. 24 Hour Listing Access We offer 24 hour access to a secure online account that allows traditional home sellers and FSBO sellers to be in control of their listing. Our sellers may manage the price, photos, description, etc. to their listing through our innovative website.  

5. List Online Home sellers can choose from our Flat Fee MLS service packages from above and list their home online in one easy step. Once the online listing is completed the documents are emailed instantly. Please see How To List My Home and How Flat Fee MLS Works for more information.  

6. Turn-around Time Savvy Lane will list a house on the MLS within hours of receiving the signed documents. All new listings and changes take a few hours to propagate to all local and national real estate websites.  

7. CMA (Comparative Market Analysis) Upon request, Savvy Lane will provide sellers a free CMA report. We give sellers all the tools to effectively price & sell their home. Other flat fee brokerages, FSBO MLS listing and FSBO listing sites, do not offer professional market analysis. Majority of for sale by owner listing sites do not offer a CMA, thus making it difficult for sellers to effectively price their home for the best result.  

8. Post & Sign Savvy Lane offers more than just a listing on the MLS. With our Extended, Full and Premium Packages we provide a custom sign and post. Our sign has the owner’s phone number and MLS# printed on directly! NOT with a marker! This inspires consumer confidence that the home is listed professionally.  

9. Tools We offer the same tools that any traditional agent would in selling a home: Electronic MLS Key Boxes, All Documents, Signs, Flyers, CMA, Assistance from our licensed MLS agents, and much more... Many for sale by owner listing sites do not provide these tools.  

10. Knowledgeable Staff Savvy Lane strives to serve For Sale by Owner and traditional home sellers through knowledge, service, marketing and support. We look over all documents prior to listing a home on the MLS to ensure accuracy and the best outcome.   Savvy Lane, a top discount real estate brokerage, allows savvy home owners to sell their home without paying a 3% listing commission fee, maximizing local and national internet exposure through the MLS (State Accredited Multiple Listing Service), and stay in control of the home selling process. Savvy Lane provides the tools and customer service to FSBO sellers (For Sale By Owner) that will effectively sell a home and maximize the owner’s equity.  


 FLAT FEE MLS WORKS! See some of our recently SOLD listings.


Tuesday, November 10, 2015

You Can Negotiate Your Mortgage Closing Costs

The costs related to homebuying continue to increase, meaning it's more important than ever to shop around. The Loan Estimate, introduced in October 2015, is intended to ease that process for borrowers like you, who want to make the mortgage transaction more affordable.  Full Article

The Loan Estimate is given to you within 3 business days of turning in a mortgage application. It outlines the various terms attached to the loan, including your interest rate, estimated monthly payments and the cash you need to close.

What to look for on Page 2 Page 2 of the Loan Estimate gives you an idea of how much it may cost to close on your mortgage, including the origination fees charged by the lender and other estimated closing costs.  

The first 2 sections on Page 2 -- sections A and B -- are the most important for borrowers to understand, says Vicki Bott, senior vice president of credit strategy for Wells Fargo Home Mortgage. Here, you'll find the estimated lender fees, also known as "origination charges," and costs for third-party services that the lender will secure as part of the loan transaction.

You cannot shop around for the services listed in Section B. The amounts may vary by lender. These costs include the appraisal, credit report, flood certification and tax services.  Both sections answer the question: "What costs is this specific lender I'm shopping with charging?" Bott says.  

Shop around and save on these services Section C details the costs over which you have the most control -- you can comparison-shop for the services listed.

"There is opportunity for the borrower to go out into the market and determine if there is a vendor or company who may provide a more competitive fee," Bott says.

One major service you can and should shop around for is title insurance, though where you live may determine whether you're able to do so. For example, in Texas, the cost of title insurance is regulated, so all title companies charge the same price.

Lender fees: Any room for negotiation? The lender's fees are believed to be fixed but there could be some wiggle room, Polychron says.

 "Origination fees vary based on a number of factors, but may be negotiable both as a dollar amount or an offered interest rate."

One way to negotiate the lender fees is to ask if any of the fees may be waived, such as the application fee.  Your lender may also offer you a credit to offset some of your closing costs, but it comes with a price, usually in the form of a higher interest rate on your mortgage.  


Monday, November 9, 2015

Why Do I Have to Pay My Real Estate Agent 6%?!

Selling a house can be expensive. Not only are you probably going to have to lay out some cash to spruce it up so you can get top dollar, you also have to plan on paying a real estate commission, which usually runs 6% of the sales price. On a $300,000 home that’s $18,000 — not a small chunk of change. Full Article

So why 6%? Why not 3%? Why not a flat fee of $2,500?  In the 1940s and ’50s, the National Association of Realtors required its members to set commissions at a certain level — and also required its members to either work full time or have enough customers to earn a living as a Realtor — in order to join (only members had access to the Multiple Listing Service). In 1950, the Supreme Court ruled that requiring certain rates was illegal. (After that it became a “suggested” rate, some sources say.)

How it became 6%, however, no one seems to know.

Is the 6% Commission Outdated?  One thing to keep in mind is that real estate services are generally bundled. Services on the seller side may include marketing, advertising, open houses and help during the negotiation process. On the buyer side, real estate professionals may spend a lot of time finding and showing houses to prospective buyers, as well as helping them navigate the purchase. Similar to other bundled services, like Internet, cable or phone service, however, bundling sometimes requires consumers to purchase services they don’t need.

More and more, consumers are seeking (and finding) an “unbundling” of such services. Years ago, potential homebuyers talked to an agent, seeking advice on areas with good schools and public transportation, or low crime — now they may research it themselves. In addition, they may be checking online for homes for sale and contacting agents about a house that just went on the market, instead of looking to a real estate agent to find them a home. Furthermore, sellers may not want open houses, or to pay for services they won’t use.


Friday, November 6, 2015

Before You Buy a House, Ask Yourself These 5 Questions

A home can be a wise purchase, but don't get in over your head. Too many people jump into buying a house without giving it enough thought, simply because it seems like the next "thing to do" on their life checklist. Full Article

#1: Should You Buy, Rent or Rent-to-Own? 
First of all, should you buy a home? Or are you better off renting? There's a pervasive myth that people who rent are "throwing money away," but that's a gross oversimplification.

Take a good look at your one-, five- and ten-year plans. Ask yourself how long you plan on staying in your area. After all the transactional costs that come with home buying (closing costs, realtor commissions, inspections and appraisals), it might be cheaper for you to rent, if you think you may be moving soon.

If you're not sure, you can always rent-to-own. This is officially called a "lease purchase," or a lease with the option to buy down the road. (To use a stock market or business analogy, it's like having a "call option" or a "first right of refusal" on the property.) 

#2: How Much of a Down Payment Can You Afford? 
Making a significant down payment can eliminate your private mortgage insurance (PMI), which is tacked on to each mortgage payment you make. 

PMI is a lender's way of protecting themselves in case you default on your mortgage. This mandatory insurance can cost an extra $40-$50/month for every $100,000 you borrow. 

If you're able to put down 20 percent or more of the purchase price of the home, you'll avoid this extra fee.

#3: Do You Know How Much You'll REALLY Be Paying?  
Your principal and interest aren't the only numbers you need to estimate when buying a home. You want to get a grasp on other ongoing costs like real estate taxes and homeowner's insurance. Different areas have different tax rates, so take that into consideration when looking at neighborhoods. 

Bear in mind the county can always raise taxes, and your insurer can always raise rates, so you don't want to be too close to the brink when it comes to how much you can afford. Leave yourself a little "wiggle room" for future increases and stay away from those homes that are in the tip-top of your budget.

#4: Can You Afford the Upkeep?  
 Even brand-new homes need repairs and maintenance. If you get a reputable home inspection, you should hopefully avoid buying a money pit, but you'll still have to deal with occasional repairs and the everyday upkeep of lawn maintenance, snow removal, gutter cleaning, tree-pruning, HVAC tune-ups and even the higher utility costs that come from moving from an apartment to a house.

#5: How Soon Will You Sell? 
When you buy a home, you'll need to pay for a huge heap of closing costs. These include real estate agent commissions, title insurance, attorney fees, recording fees, surveys, excise tax, points to the lender, inspection fees, warranties -- the list feels interminable. 

In theory, closing costs are negotiable. You can ask the seller to cover some of these expenses. But "negotiable" is not a guarantee of anything. The seller might reject your offer. Or they might counter with a purchase price that's higher than they otherwise would have granted. One way or another, those closing costs will get paid.

In the End
  Purchasing a home can be a savvy financial move, as long as you manage it well. Make sure to ask yourself the above questions before signing on the dotted line, and your dream home can bring you joy for many years to come.



Thursday, November 5, 2015

Join the Savvy Lane Revolution

Savvy Lane has rebuilt real estate from the ground up by combining For Sale by Owner and the traditional process. Using our flat fee MLS service will save you thousands of dollars by eliminating the traditional 6% commission. By having your property listed on the MLS and hundreds of real estate websites you will increases your exposure tenfold.

Today 98% of buyers start their search online, make sure your property is seen on as many sites as possible with our flat fee MLS options. As a licensed brokerage Savvy Lane will provide access to the MLS, forms, yard signs, lock boxes and support to help you sell like the pros. Our proven technology has transformed the selling process.  

Savvy Lane has helped thousands save millions on commissions. Join the revolution and let us help you today.


Your finances: 3 things to get started on now

This is the time of year when certain money issues come more into focus, including those related to income-tax planning, charity scams and checking up on the financial health of family members. Full Article 

NEVER TOO EARLY FOR TAXES:
 Tax planning isn't shaping up as anything remarkable over the waning weeks of 2015. Congress hasn't passed any blockbuster legislation affecting individuals this year and, with gridlock on Capitol Hill, might not. That leaves the fate of several popular tax provisions dangling. These "extenders" must be acted on fairly soon or they won't be in force for the coming tax-return filing season.

In any year, investors are wise to determine paper gains and losses in taxable accounts, with an eye on realizing or harvesting losses before year's end. If losses exceed gains, up to $3,000 of the excess can be used to offset ordinary income, and additional losses can be carried forward to future years. 

Otherwise, taxpayers generally would be wise to defer taxable income to next year, if possible, while accelerating deductions so they can be taken in 2015. But that strategy doesn't necessarily hold if you expect to have much larger deductible expenses next year, as with a pending medical procedure, for example. 

In that case, it might pay to bunch deductions into either this year or next, if you might not qualify to itemize both years. Charitable donations are one type of deductible expense for which the timing is easy to control.

CHARITY CAVEATS: Now also is a prime time for charitable donations, and non-profit groups — and scammers — know it. Americans make about one-quarter of their charitable donations over the waning weeks of the year, according to one study. That makes it critical to give money wisely, without getting so caught up in a feel-good moment that you drop your vigilance.

Another option is to search through the "exempt organizations select check" section at irs.gov (https://apps.irs.gov/app/eos/), though this database can be cumbersome. If you donate to a non-profit that isn't legitimate and claim a tax deduction, your deduction could be disallowed, and it might trigger an audit.  

In fact, consider whether you can take advantage of a charitable tax donation. Roughly two in three Americans don't itemize and thus won't get the deduction. An alternate option, especially if money is tight, might be to donate your time instead of your cash.

FAMILY MATTERS: Holiday get-togethers offer an opportunity to check the financial health of friends and family members — elderly relatives especially. Many seniors are affluent yet susceptible to giving away their money for reasons that could involve fear, loneliness, cognitive problems and others.

Strangers account for more than half the financial fraud committed against the elderly, but family members, friends and neighbors sometimes can cause problems, too.  

Wells Fargo suggests watching out for several telltale signs that things might be amiss. Some are obvious, such as large, unexplained loans taken out by an elderly person or personal belongings that have gone missing. Also, watch for wire transfers or large credit card charges, gifts to a caretaker, utility or other routine bills not being paid, and changes to the person's will or other estate-planning documents.

(Photo: Getty Images/iStockphoto)

Wednesday, November 4, 2015

Selling Your Home: Why It Pays To List In Winter

According to a study from Redfin, homes listed for sale during winter are more likely to sell within six months than homes whose owners held off until spring. This article from Daniel Bortz of TIME offers helpful suggestions on how to sell your home faster this winter.  Full Article 

 Spring may still be peak home-shopping season, since most families want to move when the kids are out of school. Yet it actually pays to list in the winter, when buyers tend to have more urgency: A study by online brokerage Redfin found that average sellers net more above asking price during the months of December, January, February, and March than they do from June through November, even in cold-weather cities like Boston and Chicago. And homes listed in winter sold faster than those posted in spring.

Should you put your home on the market now? Unless you need to sell (say, you’ve purchased your next home or are relocating for a job), “timing always depends on supply and demand,” says Indianapolis real estate agent Christine Dossman.

To understand your local climate, check the number of days on the market for current and recently sold listings. If most are sitting for more than 60 days, it’s safer to wait until spring, when more buyers will emerge. Yet “if properties are selling quickly, take that as a green light to list,” says real estate broker Peggy Yee of Vienna, Va.

If you do move forward, these strategies will help make your home a hot seller this winter.

Price it right. The quieter winter market brings special pricing considerations. Unlike in spring, when there are more shoppers – and it may make sense to price low to try to generate a bidding war – you’re less likely to receive multiple offers. Winter is also a bad time to test the market and list high. If the house doesn’t sell, you may need to drop below market value to nab a buyer before new properties appear in spring and make yours look stale by comparison.

Schedule a tune-up. Winter buyers are particularly attuned to issues related to heating and maintenance. Get your furnace, HVAC, and roof inspected, and make any necessary repairs. Also on your to-do list: Clean the gutters, change air filters, and weather-strip the windows.

Brighten your home. Snow and gray skies make for a gloomy first impression. Warm up curb appeal with basic landscaping, and add inexpensive cool-weather plants like holly to invigorate outdoor space. Fix chipped paint, caulk windows, and repair cracked window seals, which can cause condensation that freezes over and creates an eyesore.



Monday, November 2, 2015

Thinking of renting a home? Don't.

Based on home prices from last month, it's about 23 percent cheaper to buy a home than rent one in America's 100 major real estate markets, if you're a "young buyer" looking for your first place. Full Article

A new report from real estate group Trulia analyzed the cost difference between buying a home and renting one, with a special focus on buyers ages 25-34. Trulia examined current housing prices under the assumption that "young buyers" will move every five years and can only afford a downpayment of up to 10 percent. The "Rent vs. Buy" report also assumed a 3.85 percent mortgage rate on a 30-year fixed-rate loan, itemized federal tax deductions and a 25 percent tax bracket. Even so, the conclusions are hugely encouraging: Out of America's 100 biggest housing markets, only two -- Honolulu and Silicon Valley -- showed a higher price for buying a home vs. renting one. Everywhere else, the costs tipped in favor of buying a home.

Researchers credit a changing economy for the good news: Interest rates are nearing record lows, and the housing market continues to rebound from financial letdown. Trulia estimates that this is the best time to buy a house since 2012, since the gap between the cost of renting and the cost of buying is huge in many metros, especially in Southern and Midwestern markets. How huge? Check out Trulia's 10 markets where buying is much better than renting (assuming buyers are staying for five years and putting down less than 10 percent):


Wednesday, October 21, 2015

When Should Renters Become Buyers

Renters today face the highest monthly charges in history and costs just keep rising month after month. In fact, U.S. renters pay 30 percent of their monthly income on rents while homeowners pay just 15 percent on mortgages. The steep cost of rent makes buying appealing, but many renters don’t have enough disposable income after their rent charges to save for a down payment. So what are renters to do when faced with the choice to keep paying astronomical rents or stretch finances to buy?Full Article

How did you know you were ready to buy your first home?

We were ready to buy as we had been house viewing for some months and then came upon the perfect house for our family. Because we found “the one,” we had the drive to figure out the funds for a down payment. — Ken Walker of Sun Pacific Mortgage & Real Estate

I knew I was ready to buy a home because emotionally it was all I could think about. I was nesting and wanted a nest of my own. My husband had a steady job and was into his career a few years with a growing income year over year. We had little debt and had saved a small down payment. I felt like we were ready for the financial responsibility and we were not going to be in over our heads. — Michelle Mollura of RPM Mortgage

In hindsight, were you truly ready to buy when you did?

 When we bought our house, we only thought we were ready. We were so very unprepared for what homeownership really meant, what it involved by way of finances, and how it would affect us. We would have done so much different if we had it to do over again. We’d make sure we got a home inspection, make sure we held out for a house that was more of a fit for us, and we certainly would have made sure that we knew all the costs that were going into the house and whether we could afford them or not. — Shane of Beating Broke

 I definitely wasn’t ready to buy when I bought. I bought a home before I became a student of finance, and I have now turned that property into a rental. I think being ready to buy has just as much to do with being ready to make the commitment, as it does with finances. If you’re sure you want to stay where you’re at, and you’re ready to start caring for/working on your own home, then you’re ready to look at your finances and make the decision. Buying is just as much about emotions as it is finances. There are a thousand reasons to buy and another thousand reasons to rent. There is no right or wrong, but if you’re not emotionally ready, it’s the wrong time to buy. — Kalen Bruce of Money Mini Blog

Which financial factors are preventing you from buying?

I live in New York City where home prices are far higher than anything I can afford to purchase. I also lead a very nomadic lifestyle. I can barely commit to living in the same place for more than a year. The time and monetary investment of homeownership doesn’t really lend itself to my life choices and I’m perfectly okay with that. Homeownership isn’t what my “American Dream” looks like. — Stefanie O’Connell of The Broke and Beautiful Life

When is it financially beneficial to rent instead of buy? 

 Judging by the average amount in savings accounts and investments, I would say it’s financially beneficial to rent most of the time. There is nothing wrong with renting. Only once you’re planning to settle down, you should look at buying. And then you must make sure you can actually afford a house that fits your desires. — Kalen Bruce of Money Mini Blog

I think, if you’re looking at just the financials, there are only a couple of situations where it’s better to rent instead of buy. The first situation is when you only plan on living in one location for a couple of years. Due to closing costs and other costs associated in buying a house, it can take a few years for buying to get ahead of the rent. The other situation would be in a location where the housing market is really overpriced. Yes, rent rates will be high too, but you might be better off in the long term waiting for the market to correct and purchasing a house for a lower price. — Shane of Beating Broke

When rent is just as much as buying, you need to take a look at the options, assuming you feel you have job stability to keep you in one place for at least 5 to 7 years, as that is the national average time a first-time buyer owns their first home. — Julia Hansen of Guild Mortgage

What savings advice would you give to renters hoping to buy in the next year?

 The more you save the more house you can buy; or the larger the down payment and consequently the smaller the monthly mortgage would be. I recommend working out a financial plan that cuts back on things other than your “basics.” It’s amazing what $10 to $50 here and there can add up to toward a down payment. I did it with my wife, for almost one year, and it was perfect timing as we worked out our down payment and got our perfect home. — Ken Walker of Sun Pacific Mortgage & Real Estate

Get yourself on a budget so you know where your money is going each month and you can identify areas where you can cut back. Then, take a look at all fixed monthly bills and look for ways to cut back. You might consider eliminating cable TV temporarily to get rid of that expense or take a look at your smartphone data plan to see if you can save. Then, look at your subjective spending categories. Start using coupons to save on groceries, and use a Deal of the Day website to reduce restaurant tabs. Hold off on clothing and electronic upgrades to free up more money for your down payment, and start selling your unneeded stuff on Amazon, eBay and Craigslist to generate extra cash. That strategy has a dual benefit to it — you earn extra money and when you sign on the dotted line, you’ll have less stuff to move. — Andrew Schrage of Money Crashers

  I would recommend contacting a mortgage professional to create a plan for achieving homeownership. Check your credit and ensure that you are doing everything possible to maintain the best score. Paying down debt would be my next recommendation. Often times, debt has a larger impact on the debt-to-income ratio due to the shorter term and higher interest rates on revolving debt or installment debts when compared to a higher mortgage loan. It’s important to understand how large of a loan you will qualify for and feel comfortable paying each month. Once you determine this threshold, the mortgage professional can target the right purchase price and the required down payment, which will provide a savings goal. The mortgage professional can also provide an explanation of loan programs that exist for today’s buyers to find the best fit. — Michelle Mollura of RPM Mortgage


Timeline for moving

Moving takes months of planning and then weeks of fixing what you forgot to plan. To help ease some of the stress that comes with relocating your family, we’ve created a timeline for moving to get you started. Let it serve as a checklist in the weeks building up to the big day! 

Source

Monday, October 19, 2015

The Best Cities For Trick-Or-Treating

Every year at this time, Zillow highlights the best U.S. cities for kids to go trick-or-treating. Among the top 10 cities on this year’s list:

  • San Francisco 
  • San Jose 
  • Los Angeles 
  • Phoenix 
  • Chicago 
  • San Diego 
  • Sacramento
Other top cities include Charlotte, Las Vegas, Portland, Dallas, Seattle, Nashville and Jacksonville. Details behind the results are outlined in this article from Zillow’s Alexa Fiander.  

It’s our favorite time of year again – Halloween! Bring on the haunted houses, creepy costumes and goodies galore. 

Halloween also means it’s time for Zillow’s annual roundup of the best cities in the U.S. to take your little creatures trick or treating.  

Zillow’s research team has been data crunching around the clock to nail down the winners, introducing a new and improved methodology that allowed us to identify areas with the greatest share of population under the age of 15, and where homes are closest together. After all, trick or treating is way more fun with other kids and when you can get the most candy in the shortest amount of time. Full Article 


Friday, October 16, 2015

Common Myths About Buying A Home

When it comes to buying a home, there are several myths that could be keeping potential new homeowners from moving forward in the process of purchasing and owning their dream home. This article from GOBankingRates aims to clear up some of the most common “mythunderstandings” about home buying. Full Article

First-time buyers tend to make assumptions about down payments and other facts about the home buying process. The truth is that regulations on mortgage financing have changed since the subprime mortgage crisis upended the industry and kicked off a global recession in 2008.

Federal regulations initially tightened lending standards to prevent defaults and foreclosures. The new standards used stricter assessments to determine whether prospective buyers had the ability to repay their mortgages. In January 2014, however, regulators changed those rules after real estate groups and consumer advocates claimed that millions of Americans would not be able to qualify for housing loans. As a result, the proposed 20 percent down payment rule was dropped. Banks now are only required to document that a borrower has the means necessary to afford a mortgage as long as it does not exceed a certain threshold of debt.

MYTH: A big down payment is required. According to Bank of America, between 5 percent and 20 percent of a home’s purchase price is required for a down payment. Lenders typically require private mortgage insurance for down payments under 20 percent. The purpose of PMI is to protect the lender if you default on the mortgage. PMI typically costs between .05 percent and 1 percent of the loan amount annually. So PMI of 1 percent on a $100,000 mortgage, for example, would cost $1,000 a year or about $83 a month.

Richard Airey, senior mortgage originator with Finance of America Mortgage, said that the 20 percent down payment requirement “is probably the most common misconception I encounter.” He said loans from the Federal Housing Administration require a down payment of 3.5 percent of the home’s purchase price. Loans from the Department of Veterans Affairs and the U.S. Department of Agriculture require no down payment for eligible buyers.

For buyers who only have a small down payment, there could be a way around paying for PMI, said David Hosterman, a branch manager with Castle & Cooke Mortgage. “Consumers can choose to do what is called borrower-paid single premium mortgage insurance to avoid having monthly mortgage insurance,” he said. “This is typically an up-front charge the borrower has, which allows them to buy out of the mortgage insurance for the life of the loan. This is typically only allowed on conventional loans.”

MYTH: I need perfect credit. Your credit report is separate from your credit score. Your FICO credit score, which is a measure of your credit worthiness, is based on your credit report from the three credit reporting bureaus. Scores range from 350 to 850. You can qualify for a conventional mortgage with favorable terms at the 720 level and up. First-time home buyers can secure an FHA loan with a credit score of 620 or above.

Buying a home with bad credit is not impossible. “Borrowers can qualify for government loan programs with a FICO score as low as 580,” Airey said. “These loan programs include VA and FHA loans. The USDA requires a 620 FICO score. Conventional financing requires a 640 score or above.”

Generally, better financing terms are available for those with higher credit scores. Buyers with lower credit scores will pay higher interest rates for mortgages.

MYTH: Fixed-rate loans are best. This myth is based on the belief that mortgage payments on an adjustable rate mortgage can skyrocket along with interest rates. But what’s more important to consider is the length of time you intend to stay in the house.

“If you are planning on staying in the home for anywhere from four to seven years, consider a shorter-term fixed rate or even an adjustable rate mortgage,” she said. “For example, Navy Federal offers a 5/5 adjustable rate mortgage that only adjusts once in 10 years and has a lower rate than the 30-year fixed-rate loan. Remember, the longer the fixed rate, the higher the interest rate.”

MYTH: Location is most important. A quiet neighborhood of homes with white picket fences might be one vision of the American Dream, but Miller suggested that savvy buyers instead seek “hidden gems.”

“Some of the best deals are found in areas that haven’t reached their full potential,” she said. “Look at the community you are buying in. Is construction planned? Are there new housing units being built? Try to glimpse into the future and what the area will look like in five to 10 years.”


Thursday, October 15, 2015

6 Costs That Go Into Your Mortgage Payment

We all know that buying a home is a big financial decision—likely among the largest you will make your life. So what is all your money going toward, really? It goes far beyond just principal and interest on the actual home. Check out this list of monthly expenses you will likely encounter as a homeowner. Full Article

Mortgage  If you aren’t paying for your home upfront in cash, you will have to finance it. Your monthly mortgage payment goes toward the amount you originally borrowed (principal) and the interest on that principal. The amount is calculated based on how much you borrowed, the interest rate you and your lender agreed upon, and the length of the loan.

Property Tax  Taxes can add hundreds of dollars to your monthly bills, but they help cover valuable public expenses such as community safety, schools, infrastructure, and more. Depending on where you live, you will incur different tax rates. Property taxes are calculated by local government and are usually based on your home’s assessed value.

Insurance  Between basic homeowners insurance, which offers protection against fire and theft, and private mortgage insurance, which protects your lender against your defaulting on the loan if your down payment was less than 20% of the mortgage value, insurance can be a big item in your monthly budget. And don’t forget that you may need additional coverage against things such as floods or earthquakes depending on where your home is located.

Maintenance  Owning a home means you are responsible for repairs and upkeep, unlike when you rent. It’s important to have money set aside in your budget to cover everything from small do-it-yourself jobs to the serious issues that inevitably come up from time to time. Hopefully your home inspection can help prepare you for the life expectancy of major components such as the roof, plumbing, and electrical system.

Utilities  Every month, you have to pay your utility bills, from heating and cooling to electricity, natural gas, and water. These can fluctuate throughout the year based on outside conditions such as temperature and humidity. It’s a good idea to budget for this variable expense by looking at the previous year’s usage.

HOA fees  If you purchase property in a condominium- or townhome-type community covered by a homeowners association, you will have to pay yearly or monthly fees to maintain common areas and other shared expenses.






Wednesday, October 14, 2015

The Sneaky Science of Selling Your Home Revealed

Selling a home isn’t just about slapping down a fresh coat of paint—you need to delve into home buyers’ brains and figure out what makes them tick. From the moment they spot your listing to the instant they walk through your door, what persuades them to make an offer, and stick around to close the deal? To find out, we culled the most recent scientific studies that examine the home-buying mind to find out what turns it on—and off—and how you can use this information to your advantage. Full Article

Buyers know within seconds if they want a home  With a decision as weighty as a home purchase, one might think that buyers deliberate over all the pros and cons before they decide to sign on the dotted line. Yet studies show this is not the case.

According to the “Psychology of House Hunting” report by BMO Financial Group, 80% of prospective buyers know if a home is right for them within seconds of stepping inside. The reason? Researchers theorize that our minds process far more information in less time than we think, so a lengthy deliberation process may be a waste of time.

Take-home lesson: Since buyers know within seconds of entering your home whether it’s The One, you’ll want to spiff up the area they’ll see in that time frame—namely, your foyer.

Containers are key for keeping this mess under control: baskets or racks for shoes, bowls for keys and change—and, unless you have a nearby closet, you can never have too many coat hooks. Be sure to stash any seldom-used items elsewhere. Anywhere else.

They find aromatherapy confusing  It’s not all about what home buyers see; what they smell matters, too. But that doesn’t mean you should fill your home with potpourri or freshly baked cookies.

These “complex” scents can actually backfire in homes, according to a study by Eric Spangenberg at Washington State University, who found that shoppers will spend 32% more in stores where he piped in a simple orange scent rather than a multifaceted blend of orange, basil, and green tea. The reason? Complex scents may be nice, but they’re also more distracting as people try to figure out what they are.

Take-home lesson: If you go for a scent, keep it fresh and simple. Spangenberg recommends lemon, basil, or pine. You have no time to grab scented candles?

They’re wary of the number 9 in a price  On just about any shopping spree, we’re wooed by “charm prices”—in other words, T-shirts or towels priced at $9.99 rather than a round $10—because consumers tend to think that prices ending in 9 are a way better deal. Only with big purchases like homes, charm pricing makes buyers wary.

According to a study by Old Dominion University, 9’s near the end of a home price—say, $199,000 versus $200,000—are a turnoff. Why? Because these homes appear to be trying too hard to look like a bargain, and buyers don’t like that whiff of desperation when it comes to such a big purchase.

Take-home lesson: Avoid 9’s near the end of your asking price, because buyers may have a knee-jerk impulse to turn away.

Prices with round numbers are a turnoff, too  Another number no-no? Pricing your home with round numbers with lots of zeroes, like $200,000, seems like you pulled this number out of a hat. A more specific number like $217,000, on the other hand, makes it look like you’ve really done your homework and know exactly what your home is worth.

Take-home lesson: Avoid the round number trap and make sure your asking price is specific.

Buyers fall hard for staged homes  Staging a home to sell is all the rage these days, and research shows it works: A study by the Real Estate Staging Association looked at 63 unstaged homes that sat on the market for an average of 143 days. Once those houses were professionally staged, they sold, on average, 40 days after their makeover.

Take-home lesson: Pay attention to presentation. But you may not have to open your wallet for a professional stager; the basic premises are simple ones that anyone can put into practice. For one: If you’re already moved out, get some furniture back in the house.


Monday, October 12, 2015

How to Raise Your Credit Score Before 2016

If your credit score is low, follow these tips to improve it before the New Year.

As 2016 approaches, are you realizing that your credit score is lower than you'd like? Perhaps you have plans to buy a house, purchase a car or get a new credit card in 2016, but your credit score is holding you back. If so, it's time to figure out how to raise your credit score before the New Year approaches. Full Article

How to Improve Your Credit Score in Just a Few Months

Increasing your credit score takes time and won't happen overnight -- but it might not take as long as you think. In fact, it could take only 30 to 60 days to see some improvement, Forbes reports. Be patient and follow these steps as you work on improving your credit score.

1. Become an authorized user. "One of the quickest ways to improve your credit score is to be added as an authorized user to credit cards of your family members -- or possibly friends -- who have a stellar score," said David Bakke, a financial expert with Money Crashers. "You should ask to be added to the cards with the longest credit history, the highest spending limits and those with no late payment history in order to have the most optimal effect."

If you can be added to more than one credit card, this can speed up the credit score improvement process as well, Bakke added. He said you could expect to see a change in your score in about 90 days using this method. I was able to add myself as an authorized user to a family member's credit card, and my score improved in about 90 days.

2. Keep your revolving balance low. Make payments frequently on your credit cards in order to keep your revolving line of credit and balance low. If you can keep your credit utilization as low as 30 percent, or even at 10 percent or lower, you can protect your credit score. In order to know what percent that is, first look at your statement to see what your current credit limit is. If your limit is only $500, this means you would make payments frequently enough to keep your balance between $50 and $150.

If you still want to use your credit cards frequently while trying to raise your credit score, you don't have to stop using them -- just double or triple up your payments each month. Instead of making one large payment each month, make several smaller payments to keep that balance as low as possible.

If you still want to use your credit cards frequently while trying to raise your credit score, you don't have to stop using them -- just double or triple up your payments each month. Instead of making one large payment each month, make several smaller payments to keep that balance as low as possible.

3. Pay down your most maxed-out balance first. Your FICO score looks at your overall debt-to-credit ratio and also your individual debt-to-credit ratios when calculating your credit score on credit cards, said Linda P. Jones, a personal finance expert. "Rather than go along with the 'debt snowball' of paying off your smallest balances first, consider paying your most maxed-out balance down to 50 percent first," she said.

4. Pay every bill on time. You're already adding in some extra payments each month to keep your revolving credit balance as low as possible, but if you really want to take it one step further, pay every debt on time to avoid late payments. The bulk of your credit score, 35 percent, is derived from your payment history. If the payments are made on time and in full, it could have a positive impact on your credit score.

5. Check for and correct any errors on your credit report. When you check your credit report, make sure it's accurate. This is vital to raise your credit score quickly. Many consumers find errors on their credit reports, from misspelled names and wrong addresses to credit cards they never even opened. Don't let an error bring your score down; correct it immediately.

6. Make small purchases on a secured credit card. Another tactic that can raise your credit score is taking out a secured credit card and making small charges on the card that you know you can pay off on time, said Bakke. This should boost your credit score within a short period of time. Bakke said he has personally seen this tactic yield an improved score right around the three-month mark.

7. Utilize a 'rapid rescore' to boost your score quickly. If you're trying to raise your credit score because you're seeking approval on a mortgage loan, you might want to take advantage of what is known as "rapid rescore," said Bakke. This process quickly updates a credit history with the intent of creating a new and more relevant credit history.

8. Limit your hard credit inquiries. While that big life event in 2016 might be prompting you to raise your credit score now, try to limit your number of credit inquiries right now. Credit inquiries commonly occur when you apply for a new apartment and the landlord checks your financial history, or when you apply for an auto loan or mortgage. You might be eager to hear if you qualify for more credit, but be patient. Your credit score takes a hit with every hard inquiry.