original post: https://activatedagent.com/buying-a-home-is-still-affordable/

The last year has put emphasis on the importance of one’s home. As a result, some renters are making the jump into homeownership while some homeowners are re-evaluating their current house and considering a move to one that better fits their current lifestyle. Understanding how housing affordability works and the main market factors that impact it may help those who are ready to buy a home narrow down the optimal window of time in which to make a purchase.

There are three main factors that go into determining how affordable homes are for buyers:

1. Mortgage Rates
2. Mortgage Payments as a Percentage of Income
3. Home Prices

The National Association of Realtors (NAR) produces a Housing Affordability Index. It takes these three factors into account and determines an overall affordability score for housing. According to NAR, the index:

“…measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national and regional levels based on the most recent price and income data.”

Their methodology states:

“To interpret the indices, a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index above 100 signifies that family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced home, assuming a 20 percent down payment.”

So, the higher the index, the more affordable it is to purchase a home. Here’s a graph of the index going back to 1990:The blue bar represents today’s affordability. We can see that homes are more affordable now than they’ve been at any point since the housing crash when distressed properties (foreclosures and short sales) dominated the market. Those properties were sold at large discounts not seen before in the housing market for almost one hundred years.

Why are homes so affordable today?

Although there are three factors that drive the overall equation, the one that’s playing the largest part in today’s homebuying affordability is historically low mortgage rates. Based on this primary factor, we can see that it’s more affordable to buy a home today than at any time in the last eight years.

If you’re considering purchasing your first home or moving up to the one you’ve always hoped for, it’s important to understand how affordability plays into the overall cost of your home. With that in mind, buying while mortgage rates are as low as they are now may save you quite a bit of money over the life of your home loan.

Bottom Line

If you feel ready to buy, purchasing a home this summer may save you a significant amount of money over time based on historical affordability trends. Let’s connect today to determine if now is the right time for you to make your move.

original post: https://activatedagent.com/americans-see-real-estate-as-a-better-investment-than-stocks-or-gold/

Last month, in a post on the Liberty Street Economics blog, the Federal Reserve Bank of New York noted that Americans believe buying a home is definitely or probably a better investment than buying stocks. Last week, a Gallup Poll reaffirmed those findings.

In an article on the current real estate market, Gallup reports:

“Gallup usually finds that Americans regard real estate as the best long-term investment among several options — seeing it as superior to stocks, gold, savings accounts and bonds. This year, 41% choose real estate as the best investment, up from 35% a year ago, with stocks a distant second.”

Here’s the breakdown:The article goes on to say:

“The 41% choosing real estate is the highest selecting any of the five investment options in the 11 years Gallup has asked this question.”

Is real estate really a secure investment right now?

Some question American confidence in real estate as a good long-term investment right now. They fear that the build-up in home values may be mirroring what happened right before the housing crash a little more than a decade ago. However, according to Merrill Lynch, J.P. Morgan, Morgan Stanley, and Goldman Sachs, the current real estate market is strong and sustainable.

As Morgan Stanley explains to their clients in a recent Thoughts on the Market podcast:

“Unlike 15 years ago, the euphoria in today’s home prices comes down to the simple logic of supply and demand. And we at Morgan Stanley conclude that this time the sector is on a sustainably, sturdy foundation . . . . This robust demand and highly challenged supply, along with tight mortgage lending standards, may continue to bode well for home prices. Higher interest rates and post pandemic moves could likely slow the pace of appreciation, but the upward trajectory remains very much on course.”

Bottom Line

America’s belief in the long-term investment value of homeownership has been, is, and will always be, very strong.

by: Devon Thorsby

original article: https://www.msn.com/en-us/money/realestate/12-mistakes-to-avoid-when-selling-your-home/ar-BB1gRXfT

You may be one of the many homeowners considering a home sale to potentially benefit from the seller’s market that exists throughout much of the U.S., where buyers outnumber available properties, leading to higher prices and plenty of bidding wars.© (Getty Images) an estate agent shows a couple around a refurbished period home

But selling a house can become more difficult if you ignore the tried-and-true practices that have helped home sellers in the past. “It’s a hot market, but it’s a hot market for things that are priced correctly and prepared to come to the market,” says Molly Gallagher, real estate agent and partner of the Falk Ruvin Gallagher Team, part of real estate brokerage Keller Williams Milwaukee North Shore in Wisconsin.

Here are 12 mistakes to avoid when selling your home:

• Working alone.
• Waiting for the home selling season.
• Pricing too high.
• Refusing to make changes.
• Keeping clutter.
• Opting not to neutralize.
• Skipping major repairs.
• Cutting costs on photography.
• Hiding problems.
• Being unavailable.
• Being unwilling to negotiate.
• Letting your emotions get the best of you.

Working Alone

Not hiring a real estate agent to represent you may seem like an easy way to avoid paying commission, but you’ll miss out on a real estate agent’s market knowledge, contacts and help with the process. Unless you have a real estate license or are planning to find an iBuyer, a real estate agent is key to a successful – and less stressful – home sale.

For-sale-by-owner properties tend to sell for a lower price overall. In the National Association of Realtors’ 2020 Profile of Home Buyers and Sellers released in November 2020, FSBO homes sold at a median of $217,900, compared to a median sale price of $242,300 for properties that sold with the assistance of an agent. If you’re looking to sell your home for its full market value, professional insight is more likely to get you there.

Waiting to Sell

Spring and early fall are often hailed as the best times to sell a house, but that doesn’t mean you should wait months to put your home on the market. While December and August see the fewest sales homes still sell every month of the year, says Anne DuBray, a real estate broker with Coldwell Banker Realty in Deerfield, Illinois.

In fact, February is the best month to put your property on the market, DuBray says – even in places that see long, cold winters like Chicago and Milwaukee. “People are less distracted in that month than every other month of the year,” DuBray says.

Pricing Too High

You want to sell your house for top dollar, but be realistic about the value of the property and how buyers will see it. If you’ve overpriced your home, chances are you’ll eventually need to lower the number, but the peak period of activity that a new listing experiences is already gone.

“Time will kill you,” DuBray says. “You still think you’re going to get showings and showings (as time goes on) and you just don’t.” For that reason, it’s important that your real estate agent is honest with you about what your home will sell for, based on the recent sales of similar homes in the area.

Refusing to Make Changes

Unless you’re planning to sell your house to an investor who will flip the property, selling your house “as is” won’t yield the highest possible sale price.

Homebuyers today expect move-in ready conditions and want to see a blank slate that allows them to picture themselves living in the home. That means you’ll need to update appliances, paint walls neutral colors such as gray or khaki and remove old carpeting.

Keeping Clutter

It’s tough to remove belongings while you’re still living in your house, but presenting each room and space in its best light means you’ll need to declutter in more ways than one. Get rid of items you don’t need anymore, but also remove oversized couches and other large furniture that dwarfs the room, clear out closets so they don’t look overcrowded and put away decor that displays too much personal detail.

“Just because you see any empty surface doesn’t mean you have to have something there. Give the eyes a moment to rest,” wrote Jessica Harris, an interior designer and manager of production design at furniture retailer Living Spaces, based in Southern California, in an email.

Opting Not to Neutralize

While removing personal decor choices is a part of decluttering, it’s also an important part of neutralizing your house so the buyer doesn’t immediately think of the people who currently live in the home.

“Remember to remove personal photos, memorable items and more from the home,” Harris says. “You want the potential buyers to envision it’s their home, not yours. If it’s something you question, go with your gut. Think simple, clean and refresh.”

That goes for your personal design tastes as well. Busy wallpaper, bright colors and trendy furniture can look amazing in your home, but buyers won’t be able to look past them and consider the space first.

Skipping Major Repairs

Pulling up carpeting and painting the walls are relatively easy tasks to tackle, but you’ll want to fix major issues as well. Cracks in the foundation or a new roof are expensive fixes that you may be wary of taking on, especially when you won’t likely recoup the entire cost in the sale. But you’re better off fixing these issues now rather than having the buyer ask for a credit to cover the cost of the repair later. This way, you have more say over who does the job and the total cost of the repair.

Plus, newly replaced features become a selling point once the property is listed. Gallagher says replacing the roof before listing your home can be cheaper than the cost a buyer would subtract from an offer. “You’re likely to get that (cost back) in the sale price if you do the new roof,” Gallagher says.

Cutting Costs on Photography

The first way many buyers see your property is by viewing photos of the house online, so don’t make them cross your house off their list before they’ve even visited.

Most real estate agents include professional photography in their marketing budget. Even if you can’t get a professional, make sure all photos give the buyer an idea of the size of the rooms. Also make sure photos are well-lit and keep you out of the frame in any reflections.

Hiding Problems

If there are problems with the property you can’t afford to repair before putting it on the market, you have to be honest about them – even if they’re not visible to the naked eye. Sellers are required to note recent repairs, problems and updates in the seller’s disclosure.

“All those things are going to come up in the inspection,” Gallagher says, adding that it’s best for everyone to know in advance rather than let the buyer have second thoughts after reading the inspection report. Even if the inspection doesn’t catch a leak or structural issue, but the buyer can prove your knowledge of it later, you could be facing a lawsuit.

Being Unavailable

When your house is on the market, showing the house should be your priority. That means if you get a call that a buyer would like to tour the house, you need to be able to leave the house in pristine condition quickly.

Even on holidays, an interested buyer is likely serious about making an offer and you shouldn’t refuse a showing. So while you’re trying to sell your house, aim to hold Thanksgiving or other holiday celebrations elsewhere.

Being Unwilling to Negotiate

If you’ve received an offer for your house that isn’t quite what you’d hoped it would be, expect to negotiate. While you’ll naturally feel your asking price is more than fair, the only way to come to a successful deal is to make sure the buyer also feels like he or she benefits.

If you would like to see the sale price come up, consider offering to cover some of the buyer’s closing costs or agree to a credit for a minor repair the inspector found.

Letting Your Emotions Get the Best of You

It’s natural to have some emotional attachment to your house after living in it for years and celebrating milestones, holidays and accomplishments with your family and friends there. But you have to view selling your house as a business deal. A low offer is not a personal affront, but a start that can either be negotiated up or declined. Plans to renovate part of your house are not an insult to your taste, but a difference in preferences.

The more you can approach the sale of your house as a business deal, the better off you’ll be to make the transaction as smooth as possible.

Copyright 2021 U.S. News & World Report

original post: https://www.mykcm.com/2021/05/11/experts-say-home-prices-will-continue-to-appreciate/

It’s clear that consumers are concerned about how quickly home values are rising. Many people fear the speed of appreciation may lead to a crash in prices later this year. In fact, Google reports that the search for “When is the housing market going to crash?” has actually spiked 2450% over the past month.

In addition, Jim Dalrymple II of Inman News notes:

“One of the most noteworthy things that came up in Inman’s conversations with agents was that every single one said they’ve had conversations with clients about whether or not the market is heading into a bubble.”

To alleviate some of these concerns, let’s look at what several financial analysts are saying about the current residential real estate market. Within the last thirty days, four of the major financial services giants came to the same conclusion: the housing market is strong, and price appreciation will continue. Here are their statements on the issue:

Goldman Sachs’ Research Note on Housing:

“Strong demand for housing looks sustainable. Even before the pandemic, demographic tailwinds and historically-low mortgage rates had pushed demand to high levels. … consumer surveys indicate that household buying intentions are now the highest in 20 years. … As a result, the model projects double-digit price gains both this year and next.”

Joe Seydl, Senior Markets Economist, J.P.Morgan:

“Homebuyers—interest rates are still historically low, though they are inching up. Housing prices have spiked during the last six-to-nine months, but we don’t expect them to fall soon, and we believe they are more likely to keep rising. If you are looking to purchase a new home, conditions now may be better than 12 months hence.”

Morgan Stanley, Thoughts on the Market Podcast:

“Unlike 15 years ago, the euphoria in today’s home prices comes down to the simple logic of supply and demand. And we at Morgan Stanley conclude that this time the sector is on a sustainably, sturdy foundation . . . . This robust demand and highly challenged supply, along with tight mortgage lending standards, may continue to bode well for home prices. Higher interest rates and post pandemic moves could likely slow the pace of appreciation, but the upward trajectory remains very much on course.”

Merrill Lynch’s Capital Market Outlook:

“There are reasons to believe that this is likely to be an unusually long and strong housing expansion. Demand is very strong because the biggest demographic cohort in history is moving through the household-formation and peak home-buying stages of its life cycle. Coronavirus-related preference changes have also sharply boosted home buying demand. At the same time, supply is unusually tight, with available homes for sale at record-low levels. Double-digit price gains are rationing the supply.”

Bottom Line

If you’re concerned about making the decision to buy or sell right now, let’s connect to discuss what’s happening in our local market.

original post: https://activatedagent.com/82338-great-reasons-to-buy-a-home-today/

The financial benefits of buying a home as compared to renting one are always up for debate. However, one element of the equation is often ignored – the ability to build wealth as a homeowner.

Most experts are calling for home prices to continue appreciating over the next several years. The most recent Home Price Expectation Survey, a survey of over one hundred economists, real estate experts, and investment and market strategists, expects home appreciation to increase as follows:

• 2021: 6%
• 2022: 4.5%
• 2023: 4%
• 2024: 3.6%
• 2025: 3.5%

Using their annual projections, the graph below shows the equity build-up a purchaser could earn, using a $350,000 home as an example:A homeowner could increase their net worth by over $80,000 in five years. That’s an average of $16,000 annually. That number should be in any equation determining the financial benefits of owning a home compared to renting.

Bottom Line

Homeowners are going to make a substantial amount of money in home equity over the next five years. If you’re ready to buy a home, let’s connect so you can enjoy this great benefit as well.

original post: https://www.mykcm.com/2021/04/16/home-is-where-the-heart-is-infographic/

Some Highlights

• There’s no doubt about it: homeowners love their homes, and that feeling has become even more important over the past year.
• The vast majority of homeowners say they’re emotionally attached to their home and that it has kept them safe during the COVID-19 pandemic.
• Owning a home provides a sense of safety, security, and accomplishment. Let’s connect to move your homeownership goals forward today.

By Erica Lamberg

original post: https://www.cnn.com/2021/03/12/cnn-underscored/20-percent-down-payment-mortgage/index.html

CNN) —
Many people believe that before buying a home, they’ll need to have 20% of the purchase price ready in cash to use as a down payment. That can make the possibility of home ownership seem overwhelming, as even buying a small property priced at $80,000 means needing $16,000 in cash at the ready, a difficult sum for many households to save.

But the notion that homebuyers need to put down 20% is a common misconception. There are lenders that can help you get a mortgage if you don’t have that much saved for the down payment. Depending on your situation, it may even be possible to get a mortgage without putting any of your own cash on the line.

However, just because you can potentially buy a house or apartment without putting down 20% doesn’t mean you necessarily should. Let’s take a look at the advantages and disadvantages and see if it still makes sense to make a 20% down payment when you buy a home.

How common is a 20% down payment?
It may seem like everyone who buys a home puts down at least 20% of the purchase price, but the statistics show it’s not quite that simple. According to a recent report from Opendoor, 35% of baby boomers are far more likely to put down 26% or more on their next home, compared to only 11% of millennials and 14% of Generation X, who both said they’d put down less.

In fact, not even a majority of recent buyers are putting down 20%. According to the most recent Realtors Confidence Index by the National Association of Realtors, 52% of all noncash buyers put down less than 20% on their home purchase in October of last year, and a whopping 74% of first-time buyers made a down payment of less than 20%.

“While making a down payment of less than 20% does lead to higher interest rates and larger monthly payments, if it allows you to buy a home sooner, you do get the benefit of starting to build equity in your home more quickly,” says Nadia Aziz, GM of Home Loans at Opendoor.

According to Aziz, many lenders have products that allow customers to pay as little as 3% down. The US Department of Agriculture (USDA) and Veterans Affairs (VA) both even offer loans with zero down payment options, though these aren’t available to everyone.

But of course, there are downsides to putting down less than 20%. You’ll have less equity to start — meaning the portion of your home that you own outright, rather than the bank having an interest in it — and a bigger mortgage. That means your monthly payments will be higher. And putting down less than 20% can have other ripple effects as well.

How does making a 20% down payment affect your mortgage?
To understand how your down payment influences the types of loans you may be offered when buying a home, let’s start with how lenders assess a borrower’s risk. One of the factors lenders consider is the LTV (loan-to-value) ratio, which is the amount you’re borrowing versus the amount your home is worth.

So if your mortgage is $80,000 and your home is worth $100,000, your LTV is 80%. The lower your LTV, the less risky the mortgage is for your lender and the more likely you are to get favorable loan terms.

Since a larger down payment resulting in a lower LTV ratio can help you qualify for lower interest rates, Aziz says it may be worth scraping together enough cash to make a larger down payment, even if it means getting family members to help out.

“The down payment can be made through the borrower’s own savings and assets, or in some cases, lenders will accept the down payment being made via a gift from a family member,” she adds, though a gift would need to be accompanied by documentation from the family member describing their relationship to the borrower and the purpose of the gift.

A gift from a family member can be one way to make it to the 20% down payment threshold.

A gift from a family member can be one way to make it to the 20% down payment threshold.

In most cases, with a down payment of less than 20% on a conventional loan, you’ll also be on the hook for private mortgage insurance, or PMI. This is essentially an additional monthly charge on top of your mortgage payment that covers the cost of insurance in the event you default on your loan. According to LendingTree, PMI typically ranges from 0.15% to 1.95%, but can reach 2.5% or more.

“From the lender’s perspective, your down payment of less than 20% makes lending money to you more risky, and the monthly PMI payments compensate the lender for taking on that higher risk,” Aziz explains.

PMI is designed to protect the lender in case you default on your mortgage, meaning you don’t personally get any benefit from having to pay it. So putting more than 20% down allows you to avoid paying PMI, lowering your overall monthly mortgage costs with no downside.

Aziz says for a conventional loan, you can request that your monthly PMI payments stop once your LTV ratio drops far enough. “PMI should automatically drop off when the loan-to-value reaches 78%. For an FHA loan, you will need to pay the PMI — the FHA calls it the mortgage insurance premium, or MIP — for the duration of the loan,” she adds.

What are the advantages of putting 20% down?
Obviously, the biggest advantage of not making a 20% down payment is that you don’t have to come up with as much cash to buy a home. But what are the advantages of putting 20% down?

Smaller mortgage loan. Making a larger down payment translates to a smaller mortgage balance to pay off over time. “In the event that market values decline, having put down a larger down payment can help you preserve equity,” says Aziz. Putting down 20% or more could also make a difference when it comes to refinancing or selling your home down the road.

Pay less interest over time. Aziz says locking in a lower mortgage rate and reducing your mortgage balance will bring down the total interest you’ll pay over the life of your loan. To determine your savings, use a mortgage calculator when evaluating how much money a 20% down payment can save you over time.

Lower monthly payments. Putting down 20% results in smaller mortgage payments, since you’re starting off with a smaller overall mortgage. It also saves you from the added expense of PMI.

Greater purchasing power. A higher down payment mean you can afford to buy a more expensive home. For example, Aziz says if you’re budgeting for a $1,000 monthly mortgage payment and can get an interest rate of 3% on a 30-year mortgage, with a 5% down payment you could afford to buy a $171,000 home, which would include roughly $685 a month for principal and interest, about $90 in PMI and the remainder for taxes and other expenses. But with a 20% down payment, a $213,000 home would fit into your budget for that same $1,000 monthly payment, since you wouldn’t have to pay PMI (though you would have higher property taxes on a more expensive property).

Greater loan options and terms. Tony Grech, a senior mortgage loan originator at Luxury Mortgage in Southfield, Michigan, says the higher your down payment is, the more flexibility you’ll have in terms of loan amounts and loan programs. “Most loans over the conforming limit (jumbo loans) will require at least 20%,” he explains. “And most ARM (adjustable rate mortgage) programs don’t start to offer lower rates than fixed until you get to at least 20% down.

Should you strive to put down 20%?
Everyone’s situation is different, and while a 20% down payment is the ideal, it isn’t necessarily required.

Everyone’s situation is different, and while a 20% down payment is the ideal, it isn’t necessarily required.
A 20% down payment is a significant amount of money for most people. According to Opendoor’s report, 82% of Gen Xers and 93% of millennials say they’d need to save up for a down payment. For some people, it can make more sense to put down less and accept a higher interest rate and monthly payment if it means building equity in a home instead of paying rent elsewhere.

But putting down 20% or more is an important goal for those who want to spend less overall on their mortgage. “It can make the home more affordable by helping you save money over time with lower interest rates and monthly payments,” says Aziz.

So while making a 20% down payment isn’t a hard-and-fast requirement when it comes to buying a home, it’s a good idea if you can pull it off. But don’t assume that you’ll be locked out of the homebuying market just because you don’t have a lot of cash. Instead, look at your options and consider whether making a down payment of less than 20% makes sense for you.

By Ana Durrani

original post: https://www.realtor.com/advice/buy/mistakes-to-avoid-when-upsizing-to-a-new-home/

Tired of having your already cramped bedroom do double duty as a home office and at-home gym? It might be time to upsize. But while getting more space may seem enticing, upsizing can hold pitfalls for unwary home buyers.

“It is important to be aware of these mistakes because upsizing can be expensive, but if you plan it well, do your research, and shop around, it doesn’t have to be,” says Lior Rachmany, founder and CEO of Dumbo Moving and Storage in New York.

Before taking the plunge, here are some mistakes to avoid when upsizing to a larger home:

Mistake No. 1: Rushing to buy a bigger home

You can’t stop fantasizing about bigger spaces, but take a break for a reality check. You don’t want to ditch your current dwelling without understanding the market and thinking things through.

“Although the frenzy of the current real estate market creates motivation to move as quickly as possible, it is important to be diligent and thoughtful in your decision process,” says John Hollyer, senior portfolio manager at Bespoke Real Estate in New York. “Make sure you understand the market, comparable sales, and value of the house you may bid on. Your broker can assist with an analysis of sold properties and competing inventory.”

And in the rush, don’t get suckered into paying for any conveniences you don’t need, such as expediting certain services.

“A lot of times, when you want service to your old home or upsized home, you are paying more for speed,” says Rachmany.

Instead, allow yourself time to get those things done.

Mistake No. 2: Miscalculating your space needs

It’s important to be realistic about how much space you actually need.

“Assess your space in your current home, and what’s missing or necessary to improve upon it,” says Hollyer. It may turn out that the floor plan or your furniture layout is the problem, and not a lack of space. By the same token, make sure that space in a new home is laid out for maximum usability.

And once you move into that bigger space, live in it for a while, without buying extra furniture, to assess what pieces you really need, says Rachmany. He says furniture needs space to be used effectively, so you can move between pieces without squeezing through.  

“Also, plan your home for everyday use, not for special occasions. People have a habit of buying too much chairs and larger-than-needed sofas for company. But you can always use foldable chairs for that,” says Rachmany.

Mistake No. 3: Ignoring long-term factors

When making any major purchase, try to picture how your life might change in coming years.

“Buying a new home that won’t potentially fit your needs in the future will only lead to another purchase and move that could be avoided with proper forward thinking,” says Hollyer.

He says to make sure to have a realistic projection of how long you plan to stay in the new home, how your family’s needs might change in that time, and whether the home would continue to meet your requirements.

Another thing homeowners often forget is that upsizing brings extra costs that can snowball over time—bigger homes cost more to maintain. 

“Factor in for larger utility bills, and have [more] money set aside to do repairs when budgeting for your new home,” says Rachmany.

Mistake No. 4: Disregarding financing

Make sure to do your homework on financing, and don’t go in blind when trying to buy a bigger (read: more expensive) home.

“Without accurate information regarding what you are qualified for, you’ll be wasting time,” says Hollyer.

Rachmany suggests leaving it to the experts if you aren’t well-versed in applying for loans or mortgages. Consider using a financial consultant and/or a mortgage broker—ask around for referrals.

“It is very easy to get screwed over by interest rates when applying for loans,” says Rachmany.

And while mortgage rates are at historic lows, experts say you should still compare financing options, which can vary considerably.

“Bigger homes mean larger property taxes, larger mortgage, and larger homeowner insurance,” says Rachmany. “Only upsize your home if you have the budget, realistically, for it.”

Mistake No. 5: Neglecting your current home

Don’t let maintenance of your current home fall by the wayside in your rush to upsize.

Rachmany suggests keeping up the maintenance of your home, and if something breaks, to fix it before you move out.

“In order to capture your current home’s peak value, you want to keep it in top condition,” says Hollyer. “Investing in routine and proactive maintenance of your current property is necessary to provide more value to you when it’s time to sell.”

Mistake No. 6: Spending too much on items for the new home

Upsizing to a new home doesn’t give you carte blanche to go crazy and overspend.

“People have an initial ‘hotel’ experience with their new home, where they leave all their lights on, and just really change their living at home habits and become more wasteful,” says Rachmany.

He suggests holding off on buying all new stuff. Instead, replace items when they break or are no longer usable.

“Extra space doesn’t always need extra items. You don’t have to fill up your kitchen counter with gadgets just because you have extra space,” says Rachmany. “See how much your living expenses change, then get extra items if needed.”

By MAURA BAIN

original article: https://www.pilotonline.com/life/real-estate/vp-hl-maura-bain-spring-cleaning-032021-20210319-mmnpvcol5jhipeo2oedgykmlda-story.html

Now that Hampton Roads has finished a long spell of rainy weather, it’s the perfect time to make your home shine for spring’s start. And, yes, also for the warmer-weather housing market should you plan to sell.

Seasonal cleaning is a must. You’ll want to give your home its “best-foot-forward” appearance to attract the perfect buyer — or just to enjoy your dwelling if you don’t plan to sell right now. Focus on the areas and spaces often overlooked to bring new life and energy to your home (and, if you’re selling, to make it market ready).

Let’s go room by room.

Kitchen

The most popular room in the house. Our kitchens see a lot of daily use and household traffic from first thing in the morning at the coffee pot all the way to the midnight snack. While you may be regularly wiping down your counters or sweeping your floors, take this time to focus on those areas that have likely been overlooked.

• Cabinets: Wipe down fronts, handles and knobs.

• Fridge: Clean the shelves and drawers inside, wipe down the top, and vacuum underneath. If your fridge has a water dispenser, now is a great time to check the filter and replace it if needed.

• Oven: Clean the inside, wipe down the cook top, and vacuum underneath. Also clean the range hood (if you have one), and kitchen exhaust fan.

• Microwave: Wipe out the inside and wash your turntable by hand or in the dishwasher.

• Dishwasher: Wipe down the outside, clean out the filter, and run a cycle of white vinegar or other cleaner to clean the inside.

• Drawers: Wipe out drawers. They can get quite dirty over time.

• Coffee maker: Now is the perfect time to run that cleaning cycle or descale your brewer.

• Walls: The walls behind your oven, cook top, and prep areas can get dirty and greasy. Use a mild cleaner to wipe them down.

• Trash can drawer. Clean not only the trash and recycling bins but also the drawer itself. Vacuum and wipe it down.

As you clean, it’s a great time to go through your kitchen and declutter. If you have items you haven’t used in months (or even years) and are willing to part with them, donate!

For showings, the best thing to do for the items you use in the kitchen daily is to place them in a tray or small bin that you can tuck away once you have finished using them. It is super easy to pull the bin out and have it ready to go the next morning.

___

Living space

Living spaces, just like kitchens, get a lot of household traffic. You may vacuum on the regular, so use this time to go after those elusive tasks that get forgotten. When your home is on the market give the carpet/flooring a once-over every morning.

• Blankets and pillows: Wash all throw blankets and, if you can remove throw pillow covers, wash those as well. If you do not have many pillows on the couch, this is a good time to purchase a few to get it ready for the photo shoot.

• Sofa: If you can, vacuum under the cushions. With all the Netflix you probably have a good amount of popcorn hanging out there. Some sofa cushions have removable covers. If you can remove them, wash them. If you have leather, wipe down the leather. Vacuum under the sofa, loveseats, chairs, etc.

• Carpet/floor: Living spaces are like a superhighway; cleaning the carpet or floor is a great idea and can help bring new life into your rooms.

• Windows: Clean the frame, sill and glass. Let the sunlight in! That will also brighten up the pictures for the photo shoot, as well as give the buyers a great clean look as soon as they enter your house.

___

Bedroom/bathroom

When it comes to your bedroom, you might put your clothes away regularly, but when was the last time you vacuumed under your bed? Dedicate time this spring to a deep dive on cleaning your bedroom and bathroom. Don’t forget about your closet; this is also a good time to find those clothes and shoes you haven’t worn in ages and donate them.

If you’re selling your home, thin out your closet to one-third of the normal amount of clothes you have in it. Pack the extra clothes away for moving day. Also:

• Bed: Wash your bed linens and freshen up your mattress with baking soda (let it sit on the bare mattress for at least 10 minutes, then vacuum it up). It is also a good time to flip or rotate your mattress to lengthen its life. If you do not have time for all of that, at least fluff the pillows or buy new pillows to get it ready for the photo shoot.

• Vacuum everywhere … under your bed, in your closet and underneath any furniture.

• Dresser: Thin out the clothes that you no longer use, and donate them. Pack them away as well even though buyers will not be opening your dresser drawers.

• Bathroom: If you have a shower curtain, wash it! Shower curtain liners can be washed — just throw it in your washing machine with some bleach. Don’t forget your bathmat; most can be put in the washing machine as well. I recommend these be taken up for the photo shoot and for showings. It makes the space look cleaner and bigger.

Some other often-forgotten areas in your bathroom are behind the toilet, the shower head, the bathroom vent fan, inside drawers that hold hair supplies and/or makeup items, and shelving where dust accumulates. The quickest way to a clean look is starting with the mirror. You may feel quite accomplished with your dental hygiene, but your mirror bears the brunt of that.

For showings, as in the kitchen the best thing to do for the items you use daily is to place them in a tray or small bin that you can tuck away in the vanity cabinet once you have finished using them. It is super easy to pull the bin out and have it ready to go the next morning. Do this for your make-up, shaving supplies, and even toothpaste and toothbrush.

___

General areas

Almost every item in your home can collect dust. Grab a duster and go to town on your TV, bookshelves, media stand, fireplace, lamps and light bulbs, picture frames, fake plants, general decor, window ledges, door frames, baseboards, and anything else you can find that has a surface. Don’t forget furniture like a dining room table and chairs — dust can get everywhere!

Other items in your home that can easily be forgotten: doorknobs, window tracks, ceiling fan blades, garbage cans and recycling bins, and pet bowl areas. During a deep clean, it’s also a good time to check that your smoke alarms and carbon monoxide detectors are working, and clean or replace your HVAC filter.

Even with new construction (or should I say, especially new construction?), HVAC filters get dirty quickly, and if you have pets, that accumulates even faster. Replace those; that adds years of service to your HVAC unit over time. Contact an HVAC service provider to clean the outdoor compressor unit so that it works as efficiently as possible and passes the home inspection.

The spring selling market is a great time to harness the new energy of the season and bring it into your house. Arm yourself with a caddy of supplies and get ready to clean, or contact a good cleaning service. Not only will your home look better, but it will also photograph better and attract more buyers. There are plenty of safe and nice-smelling cleaning products that will add a touch of aromatherapy as well as cleanliness. Getting your home ready to sell will take some work, but the results will be worth your efforts.

by: Casey Morris 

original post: https://themortgagereports.com/73666/is-now-a-good-time-to-buy-a-house-2021

2021 is a great time to buy a house, for some

There’s never been a home buying market like this one.

The ongoing COVID-19 pandemic has made 2021 a singular time to become a homeowner if that’s one of your goals this year. 

Mortgage rates are still near record lows, and work-from-home policies mean buyers have more flexibility to choose where they’ll live. 

However, high unemployment and an uncertain economy could make it hard for some buyers to get financing. 

So, is it a good time for you to buy? Here’s what you should know.

he 2021 housing market: An overview 

Interest rates plummeted to historic lows last year, and they’ll likely remain low for the next couple of years.

That’s great news for borrowers — it means lower monthly mortgage payments and bigger home buying budgets.

However, low rates have also generated more bidding wars and driven home prices up. There are fewer homes on the market and house hunting has become more competitive.

You’ll likely have to move fast when you find your dream home.

And you should figure out ahead of time how much over the asking price you’re willing to pay if it comes to that. 

Low interest rates can help buyers afford more expensive homes. But they also create more competition in the market.

The massive move to work-from-home may also have you thinking about a place with enough space to accommodate a home office, or simply spread out a little now that everyone works, studies, and socializes from their living rooms.

Work-from-home policies have given many people the freedom to reconsider where they live, allowing them to relocate to less expensive or otherwise more desirable areas without sacrificing their jobs. 

Whatever your reasons for entering the housing market, 2021 could be your year to become a first-time home buyer.

Below, we’ll address some key questions and concerns you may have about buying a house during the pandemic. 

Is buying a house during COVID a good idea? 

The decision to buy a house has less to do with the broader economy and more to do with your financial situation.

Buying a house during COVID might be a good idea if you: 

• Earn a steady income
• Have dependable employment
• Have a credit score in the 580-620 range or higher
• Have money saved up for a down payment and closing costs
• Have a low to moderate debt-to-income ratio (DTI)

In the current economy, employment and income stability are key.

Mortgage lenders want to see that your income will continue at its current level for at least 3 years after closing.

If you were recently laid off then hired back, had hours cut, or work in an industry heavily impacted by COVID, you’ll likley have a harder time getting a mortgage right now. 

But there’s an upside to buying a house during COVID.

Assuming you have good credit, you may be able to secure an ultra-low mortgage rate this year. This could lower your monthly payments and save you thousands of dollars over the life of the loan.

But you don’t want to rush into a purchase based on interest rates alone.

A mortgage is a long-term commitment, so make sure you’re financially ready, regardless of what’s happening in the real estate market. 

What’s different about buying a house during coronavirus? 

As sellers, real estate agents, and lenders comply with social distancing mandates and work to keep themselves and their teams safe, you may find that some aspects of the home buying process have gone online.

For instance, some sellers or agents may offer virtual tours rather than in-person showings, and you may opt for an online mortgage application rather than applying at a brick-and-mortar bank or lender.

Depending on who you work with and where you live, the home inspection and closing process may happen virtually as well. 

Your home buying prospects could also depend on your profession in 2021.

If you work for yourself or have non-traditional income (such as being a gig worker or seasonal worker), some lenders may be reluctant to work with you right now because they’re more risk-averse due to COVID.

However, you can ask lenders about your situation before submitting an application, and they can advise you on exactly what documents and income proof you’ll need to qualify.  

If you have a steady, reliable income and your business is not at risk during COVID, you should still be able to get a loan. If one lender denies you simply because you’re self-employed, try again with a few others that will look more holistically at your application.

Are you eligible to buy a house this year?

If you’re wondering whether you should buy a house this year, the first place to look is your personal finances.

Factors like your credit score, savings, income, and debts will determine whether you qualify for a mortgage, and how much house you can afford.

How much down payment do I need? 

Expect to put down at least 3% to 3.5% on your new home.

If you’re buying a home worth $300,000, that means you’ll need at least $9,000 to $10,500 saved for a down payment.

You need to budget for closing costs, too. These typically add 2% to 5% of the purchase price to your upfront fees. That’s another $6,000 or more on a $300,000 home loan.

Keep in mind, mortgage loans with less than 20% down charge private mortgage insurance (PMI). This adds to your monthly bill, but can help you buy a home much sooner.

Can I buy a house without a down payment?

If you’re a veteran, or if you are buying in a rural area and meet certain income limits, you may be able to qualify for a 0% down payment VA loan or USDA loan.

VA loans are typically reserved for veterans, service members, and their families. USDA loans are available in designated rural areas and were designed for low- to moderate-income buyers

If you’re not eligible for a VA or USDA mortgage, a down payment assistance program can help you close the gap and qualify for a mortgage.

Down payment assistance programs vary by state and county, but they often provide help in the form of grants or forgivable loans that may be used toward buying a home.

In some cases, the programs include cash or a loan toward a down payment, as well as help with closing costs. 

What credit score do I need to buy a house? 

The minimum credit score to qualify for an FHA loan is 580. You’ll typically need a 620 FICO score to be considered for a conventional or VA mortgage. And USDA applicants must have a score of at least 640.

Keep in mind, the higher you can get your credit score before applying for a mortgage, the better the interest rate you’re likely to get.

A high score indicates good financial habits, and lenders factor it into their lending decisions and the rates they offer. 

Can I buy a house on unemployment? 

Generally speaking, you will not be able to buy a home on unemployment income.

Lenders need to verify your income when you apply for a mortgage. They want to know it will remain steady once they’ve made the loan. Since unemployment is a temporary benefit, lenders can’t use it to qualify you. 

However, you may be able to get a mortgage if you’re unemployed but you have a documented offer of employment that indicates how much you’ll be earning once you start the job.

Mortgage lenders will also look at your credit score and your payment history while you were unemployed, as well as your down payment amount.  

Can I buy a house with student loans?

Yes, you can buy a house with student loans. However, those loans factor into your debt-to-income ratio, which is a key metric lenders use in approval decisions.

If your student loan payments take up a significant amount of your monthly income, you may have a more difficult time getting approved for a home loan. 

There are ways to improve your chances, though.

Consider loan consolidation or applying for a graduated repayment plan. Either of those options may reduce your monthly obligations, at least for a time, and that can get you to a more favorable DTI. However, ask the lender how they view modified student loan payments. Some lenders may count the full payment against you if you are on an adjusted payment plan.

If you can save more than 3% for a down payment, that may help as well, since a smaller loan means less risk for borrowers.

As a first-time home buyer, you may also want to look at small homes with lower price points. That may help you secure a loan, and it can also keep your mortgage payments manageable while you continue paying down your student debt. 

Do you have to be married to buy a house? 

No, you do not have to be married to buy a house. You can qualify for a mortgage as an individual borrower, or you can buy a home with a partner to whom you are not married.

Buying a home as a single borrower simply means you need to qualify for the loan on your own merits. You will not have a partner’s income to supplement your budget.

If you’re unmarried but want to buy a home with a partner or roommate, you can apply for the loan as co-borrowers and count both your incomes toward the mortgage.

As long as you qualify for the mortgage, it’s no harder to buy a home when you’re single than when you’re married.

The home buying process in 2021

What’s the first step when buying a house? 

The first step toward buying a house has not changed during the COVID pandemic. Potential home buyers should start by getting pre-approved for a mortgage.

A preapproval letter does not guarantee that a lender will work with you, as they will vet your finances more closely during the formal application process.

But it does give you a sense of whether you’ll qualify for financing, as well as how much you might be able to borrow.

Not only does this help you focus your home search on properties you can afford, it tells real estate agents and sellers that you’ll likely be able to go through with a purchase once you’ve made an offer. 

Do I need a real estate agent to buy a house?

You don’t need a real estate agent to buy a house, but they can be quite helpful. A real estate agent generally has deep knowledge of the local market, and they do a lot of the legwork for you.

Once you’ve told them your price range and the type of property you want to buy, they can scour listings for suitable homes and arrange showings for you.

A real estate agent or Realtor can also negotiate on price and help you hone your offer, not to mention manage a lot of paperwork and logistics on your behalf. 

The exception to the real estate agent requirement is if you buy an FHA foreclosure property. In that case, you must be represented by a real estate agent. 

Can I make an offer on a house without seeing it in person? 

Yes, you can make an offer sight-unseen, meaning without seeing the home in person. In fact, this is pretty common.

Buying a house sight-unseen has become particularly common in cities such as Los Angeles and Denver, where desirable homes get sold very quickly. In competitive markets, a sight-unseen offer may be your only chance at nabbing a property that has caught your eye.

But there are risks to doing this. Visiting a house in-person gives you a close look at the features and flaws of the home, and it allows you to get a sense of the neighborhood and what the property looks like when it’s not being professionally staged.

Making an offer before you’ve been to the home means you could be on the hook for a home you don’t like or that needs more work than you expected. 

Can I buy a house remotely?

You may be able to buy a house remotely, depending on the seller, agent, and lender’s policies.

Some listings may include a virtual tour option, and with so many lenders offering online applications, keeping your distance has never been easier. Some appraisers and inspectors will do curbside or virtual appointments rather than going inside properties. 

If your lender offers virtual closings, you can finalize your loan and take possession without needing in-person meetings.

But there are downsides to a remote purchase as well.

If neither you nor your home inspector or appraiser has taken a good look at the property, you could miss red flags that would have made you reconsider the home or at least negotiate the price. 

Common financial questions for first-time buyers

Many first-time home buyers focus on their down payment. But there are all sorts of other fees associated with buying a home — some optional and some not.

What are the fees associated with buying a home? 

When you buy a home, you’ll pay closing costs of roughly 2-5% of your mortgage loan. These can include: 

• Lender origination fee
• Mortgage points (optional)
• Prepaid property taxes and homeowners insurance
• Inspection fees
• Appraisal fees
• Title fees 
• Homeowners Association (HOA) fees 

You may be able to negotiate some of these fees with your lender.

In some instances, your seller may be willing to pay your closing costs in exchange for your willingness to pay full price or more than their asking price.

Or, you can ask your lender to cover part of your closing costs and pay a slightly higher interest rate in exchange. This is known as a “lender credit.”

Before choosing a loan, get quotes from several lenders and compare the loan estimates they provide you.

A Loan Estimate will break down all of the costs and fees associated with the loan, so you can do a side-by-side comparison to see where you’re getting the best deal. 

What are points when buying a house? 

Discount points are a fee you can pay upfront to lower your mortgage interest rate.

One point typically costs 1% of the loan amount and lowers your rate by about 0.25%.

Paying points is optional, so if you don’t have extra cash to put down when you take out your mortgage, you can still go ahead with the loan.

If you’re worried about interest costs but don’t want to pay for mortgage points, you can consider refinancing once you’ve built up equity in the house. 

What is earnest money? 

Earnest money is essentially a deposit you put down to show you’re serious about buying a house. It’s typically paid when the seller accepts your offer.

This money is not pocketed by the seller. If you move forward with the home purchase, the earnest money goes toward your down payment.

In a competitive market where homes go quickly, offering earnest money can help distinguish your offer from those of other buyers.

If you’re buying in a rural area or a slow market, your offer may be accepted with an earnest money commitment of $1,000 or less. But if you plan to purchase in an in-demand area, be prepared to offer much more than that. 

Do you get a tax break for buying a home? 

The Biden Administration has proposed a $15,000 tax break for first time home buyers. But as of this writing, the measure has not yet been passed.

You may be able to deduct the interest you pay on your mortgage on your annual tax return. This benefit only applies if you do not choose the standard deduction and you instead itemize your deductions.

Taxpayers who itemize their deductions and are single or married and filing jointly can deduct interest paid on up to $750,000. Those who are married and filing separately may deduct interest paid on up to $375,000. 

Do I qualify to buy a house now?

The best way to find out whether you qualify to buy a house is to assess your credit score and your current debts. If your score is 580 or above and your debts are relatively low, it might be a good time to buy a home.

To learn more about your options, apply for a pre-approval to find out how much a lender may let you borrow.

Be sure to request quotes from several mortgage companies and compare rates and offers before you buy.