Are Low Interest Rates Here to Stay?

KCM

Interest rates for a 30-year fixed rate mortgage have been on the decline since November, now reaching lows last seen in January 2018. According to Freddie Mac’s latest Primary Mortgage Market Survey, rates came in at 4.12% last week!

This is great news for anyone who is planning on buying a home this spring! Freddie Mac had this to say,

“Mortgage interest rates have been steadily declining since the start of 2019. These lower mortgage interest rates combined with a strong labor market should attract prospective homebuyers this spring and could help the housing sector regain its momentum later in the year.”

To put the low rates in perspective, the average for 2018 was 4.6%! The chart below shows the recent drop, and also shows where the experts at Freddie Mac believe rates will be by the end of 2019.

KCM Graph

Bottom Line

If you plan on buying a home this year, let’s get together to start your home search to ensure you can lock in these historically low rates today!

Posted by The KCM Crew

 

Ready to buy? Click HERE to get started!

 

 

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A Guide to Mortgage Interest Rates: Why They Go Down and Up, and What to Do

Mortgage interest rates are a mystery to many of us—whether you’re a home buyer in need of a home loan for your first house or your fifth.

After all, what does “interest rate” even mean? Why do rates swing up and down? And, most important, how do you nab the best interest rate—the one that’s going to save you the most money over the life of your mortgage?

Here, we outline what you need to know about interest rates before applying for a mortgage.

Mortage

Why does my interest rate matter?

Mortgage lenders don’t just loan you money because they’re good guys—they’re there to make a profit. “Interest” is the extra fee you pay your lender for loaning you the cash you need to buy a home.

Your interest payment is calculated as a percentage of your total loan amount. For example, let’s say you get a 30-year, $200,000 loan with a 4% interest rate. Over 30 years, you would end up paying back not only that $200,000, but an extra $143,739 in interest. Month to month, your mortgage payments would amount to about $955. However, your mortgage payments will end up higher or lower depending on the interest rate you get.

Why do interest rates fluctuate?

Mortgage rates can change daily depending on how the U.S. economy is performing, says Jack Guttentag, author of “The Mortgage Encyclopedia.”

Consumer confidence, reports on employment, fluctuations in home sales (i.e., the law of supply and demand), and other economic factors all influence interest rates.

“During a period of slack economic activity, [the Federal Reserve] will provide more funding and interest rates will go down,” Guttentag explains. Conversely, “when the economy heats up and there’s a fear of inflation, [the Fed] will restrict funding and interest rates will go up.”

How do I lock in my interest rate?

A “rate lock” is a commitment by a lender to give you a home loan at a specific interest rate, provided you close on your home in a certain period of time—typically 30 days from when you’re pre-approved for your loan.

A rate lock offers protection against fluctuating interest rates—useful considering that even a quarter of a percentage point can take a huge bite out of your housing budget over time. A rate lock offers borrowers peace of mind: No matter how wildly interest rates fluctuate, once you’re “locked in” you know what monthly mortgage payments you’ll need to make on your home, enabling you to plan your long-term finances.

Naturally, many home buyers obsess over the best time to lock in a mortgage rate, worried that they’ll pull the trigger right before rates sink even lower.

Unfortunately, no lender has a crystal ball that shows where mortgage rates are going. It’s impossible to predict exactly where the economy will move in the future. So, don’t get too caught up with minor ups and downs. A bigger question to consider when locking in your interest rate is where you are in the process of finding a home.

Most mortgage experts suggest locking in a rate once you’re “under contract” on a home—meaning you’ve made an offer that’s been accepted. Most lenders will offer a 30-day rate lock at no charge to you—and many will extend rate locks to 45 days as a courtesy to keep your business.

Some lenders offer rate locks with a “float-down option,” which allows you to get a lower interest rate if rates go down. However, the terms, conditions, and costs of this option vary from lender to lender.

How do I get the best interest rate?

Mortgage rates vary depending on a borrower’s personal finances. Specifically, these six key factors will affect the rate you qualify for:

  1. Credit score: When you apply for a mortgage to buy a home, lenders want some reassurance you’ll repay them later! One way they assess this is by scrutinizing your credit score—the numerical representation of your track record of paying off your debts, from credit cards to college loans. Lenders use your credit score to predict how reliable you’ll be in paying your home loan, says Bill Hardekopf, a credit expert at LowCards.com. A perfect credit score is 850, a good score is from 700 to 759, and a fair score is from 650 to 699. Generally, borrowers with higher credit scores receive lower interest rates than borrowers with lower credit scores.
  2. Loan amount and down payment: If you’re willing and able to make a large down payment on a home, lenders assume less risk and will offer you a better rate. If you don’t have enough money to put down 20% on your mortgage, you’ll probably have to pay private mortgage insurance, or PMI, an extra monthly fee meant to mitigate the risk to the lender that you might default on your loan. PMI ranges from about 0.3% to 1.15% of your home loan.
  3. Home location: The strength of your local housing market can drive interest rates up, or down.
  4. Loan type: Your rate will depend on what type of loan you choose. The most common type is a conventional mortgage, aimed at borrowers who have well-established credit, solid assets, and steady income. If your finances aren’t in great shape, you may be able to qualify for a Federal Housing Administration loan, a government-backed loan that requires a low down payment of 3.5%. There are also U.S. Department of Veterans Affairs loans, available to active or retired military personnel, and U.S. Department of Agriculture Rural Development loans, available to Americans with low to moderate incomes who want to buy a home in a rural area.
  5. Loan term: Typically, shorter-term loans have lower interest rates—and lower overall costs—but they also have larger monthly payments.
  6. Type of interest rate: Rates depend on whether you get a fixed-rate mortgage or an adjustable-rate mortgage, or ARM. “Fixed-rate” means the interest rate you pay remains fixed at the same level throughout the life of your loan. An ARM is a loan that starts out at a fixed, predetermined interest rate, but the rate adjusts after a specified initial period (usually three, five, seven, or 10 years) based on market indexes.

Tap into the right resources

Whether you’re looking to buy a home or a homeowner looking to refinance, there are many mortgage tools online to help, including the following:

  • mortgage rate trends tracker lets you follow interest rate changes in your local market.
  • mortgage payment calculator shows an estimate of your mortgage payment based on current mortgage rates and local real estate taxes.
  • Realtor.com’s mortgage center, which will help you find a lender who can offer competitive interests rates and help you get pre-approved for a mortgage.

 

Posted by Daniel Bortz on realtor.com

Ready to buy? Click HERE to find your next home!

Buying a Home Young is the Key to Building Wealth

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Homeowners who purchase their homes before the age of 35 are better prepared for retirement at age 60, according to a new Urban Institute study. The organization surveyed adults who turned 60 or 61 between 2003 and 2015 for their data set.

The full breakdown is in the chart below:

chart

The study goes on to show the impact of purchasing a home at an early age. Those who purchased their first homes when they were younger than 25 had an average of $10,000 left on their mortgage at age 60. The 50% of buyers who purchased in their mid-twenties and early-30s had close to $50,000 left, but traditionally had purchased more expensive homes.

chart 2

Many housing experts are concerned that the homeownership rate amongst millennials, those 18-34, is much lower than previous generations in the same age range. The study results gave a great reason why this generation should consider buying instead of signing a renewal on their lease:

“As people age into retirement, they rely more heavily on their wealth rather than their income to support their lifestyles. Today’s young adults are failing to build housing wealth, the largest single source of wealth, at the same rate as previous generations.

While people make the choice to own or rent that suits them at a given point, maybe more young adults should take into account the long-term consequences of renting when homeownership is an option.”

Bottom Line

If you are one of the many young people debating whether buying a home this year is right for you, let’s get together to discuss your options!

 

Posted by The KCM Crew

Start searching for your next home today! 

7 Mistakes You’re Probably Making When Storing Your Holiday Decorations

Christmas

istock/Willowpix

It’s all fun and spiked eggnog when it’s time to decorate for Christmas. But after the holiday is over you’ll probably hear crickets instead of clamors to help with the twinkle lights and wreaths.

Yes, the post-Christmas haze is exhausting. And the only thing you may feel like doing is tossing every ornament into a giant bag—and then stuffing it in the nearest closet. Unfortunately, doing this will guarantee you a load of frustration come next year

Take heart: Even home professionals can’t stand the thought of organizing their baubles.

“Honestly, it took a busted pipe in my basement for me to get my act together and store things in a reasonable manner,” admits Karen Gray-Plaisted of Design Solutions KGP, a home staging and decorating company.

Don’t let your holiday finery become a hot mess! Here are seven mistakes to avoid when taking down and storing decorations.

1. Working solo

Like folding king-size sheets, storing holiday decorations with a partner makes things much easier, says Darla DeMorrow, author of “Organize Your Home With Sort and Succeed.”

“Having someone to help with carting the storage boxes up and down can shorten the process,” she says.

And who knows, she adds, you might uncover some things that will make you more efficient next year—like that one of you doesn’t mind schlepping boxes, while the other likes the tedium of packing things in bubble wrap.

2. Not properly protecting your decorations

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Pack up your decorations properly.skhoward/IStock

And speaking of bubble wrap, don’t gloss over this step.

“Not taking the time to protect delicate items is a big mistake when it comes to putting away holiday decor,” says Jamie Novak, author of “Keep This Toss That.”

It’s normal to want to rush through this tedious job so you can be done with it, but moving too quickly will just result in breakage.

3. Forgetting to cull (and donate) your decorations

If you didn’t put it up this year, what are the chances you’ll do it next year?

“Anything that’s in disrepair or out of favor I toss,” Gray-Plaisted says.

After all, it’s a good excuse to shop the after-Christmas sales—where you’re sure to find new items that you’ll actually want to display next year. And on that note, make sure to save room in storage for anything you might buy.

“You will get more, so don’t pack your bins all the way to the top,” Novak says.

Before you toss your purged decorations in the trash, though, consider donating them. Shelters, public libraries, health care centers, and other nonprofits might welcome the chance to give your used decorations a second life.

4. Tossing decorations in willy-nilly

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Don’t throw stuff into storage without a clear plan.Susan Vineyard/iStock

If you have garland in four different boxes, you’ll never keep track of it from year to year. Instead, store like with like.

“Put items to decorate the outside together, and place soft goods in their own bin, such as tablecloths, stockings, runners, and napkins,” Gray-Plaisted suggests.

And be sure to pack up the pieces, parts, and written directions for each item together.

“You think you’ll remember how to set up the tree, but you won’t,” Novak cautions.

5. Labeling your decorations vaguely

On a related note, once you’ve packed things together, get out that magic marker. Sure, you’ll write “lights” on the box of lights, but try to be more specific when it comes to labeling your containers. Are the lights for the mantel, mailbox, Christmas tree, or something in the yard?

Novak also recommends labeling boxes as “X out of X” (e.g., “5 out of 7”). If you do this, you won’t miss out on a box or search for one that doesn’t exist.

6. Cheaping out on organizational supplies

Christmas 4

Plastic storage bins filled with decorations for various holidaysChris_Soucy/iStock

Stop yourself before reaching for those brown paper bags!

“Make this the year to invest in sturdy containers for all your ornaments,” Gray-Plaisted urges.

“They may seem pricey, but good ones can last the rest of your life,” DeMorrow adds.

And as long as you’re splurging, opt for red and green containers that are easy to spot in a garage or storage space.

7. Not keeping notes

As you put things away, make notes on what needs replacing or items you need to add your collection (e.g., broken lights, stained cocktail napkins, or a bigger turkey platter for next year). With a detailed list, you can strategically hit those half-price sales in January and fill in the holes for next year.

Posted by Jennifer Geddes on realtor.com

 

5 Reasons to Sell This Winter!

Winter

Here are five reasons listing your home for sale this winter makes sense.

1. Demand Is Strong

The latest Buyer Traffic Report from the National Association of Realtors (NAR) shows that buyer demand remains strong throughout the vast majority of the country. These buyers are ready, willing and able to purchase… and are in the market right now! More often than not, multiple buyers are competing with each other to buy a home.

Take advantage of the buyer activity currently in the market.

2. There Is Less Competition Now

Housing inventory is still under the 6-month supply that is needed for a normal housing market. This means that, in the majority of the country, there are not enough homes for sale to satisfy the number of buyers in the market. This is good news for homeowners who have gained equity as their home values have increased. However, additional inventory could be coming to the market soon.

Historically, the average number of years a homeowner stayed in their home was six but has hovered between nine and ten years since 2011. There is a pent-up desire for many homeowners to move, as they were unable to sell over the last few years because of a negative equity situation. As home values continue to appreciate, more and more homeowners will be given the freedom to move.

The choices buyers have will continue to increase. Don’t wait until this other inventory comes to market before you decide to sell.

3. The Process Will Be Quicker

Today’s competitive environment has forced buyers to do all they can to stand out from the crowd, including getting pre-approved for their mortgage financing. This makes the entire selling process much faster and much simpler as buyers know exactly what they can afford before home shopping. According to Ellie Mae’s latest Origination Insights Report, the time to close a loan has dropped to 46 days.

4. There Will Never Be a Better Time to Move Up

If your next move will be into a premium or luxury home, now is the time to move up! The inventory of homes for sale at these higher price ranges has forced these markets into a buyer’s market. This means that if you are planning on selling a starter or trade-up home, your home will sell quickly, AND you’ll be able to find a premium home to call your own!

Prices are projected to appreciate by 4.8% over the next year according to CoreLogic. If you are moving to a higher-priced home, it will wind up costing you more in raw dollars (both in down payment and mortgage payment) if you wait.

5. It’s Time to Move on With Your Life

Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should?

Only you know the answers to the questions above. You have the power to take control of the situation by putting your home on the market. Perhaps the time has come for you and your family to move on and start living the life you desire.

 

Posted by The KCM Crew

Ready to sell? Click HERE to get started today!!

‘Tis the Season (to Sell): 6 Reasons You Shouldn’t Take Your Home Off the Market for the Holidays

iStock; realtor.com

As we careen at warp speed toward Thanksgiving, Christmas, and all of the joyous (read: stressful) festivities in between, you might be tempted to take your home off the market—or hold off on listing it—until after the new year. After all, you’re swamped with cooking, shopping, and decorating, and the last thing you need is a bunch of potential buyers traipsing through your house, right?

Wrong, says Tg Glazer, branch vice president and managing broker of Coldwell Banker Residential Brokerage in Bernardsville, NJ.

“It’s a huge, huge mistake to either remove your home from the market during the holiday season, or to not put your home on the market if you’re getting ready to sell,” Glazer says.

Why? The first reason is painfully obvious: Your house can’t actually sell if it’s off the market, says Nora Ling Lane, executive vice president for Allie Beth Allman & Associates, a Berkshire Hathaway affiliate in Dallas.

“I’m pretty adamant about leaving a home on during the holidays,” Lane says. “Sure, people are busy, but I’d rather buyers see a house messy with baking in the kitchen than miss the house. Let somebody else take their house off the market and miss out.”

In fact, this time of year can actually be ideal for selling. Here’s why.

1. Your listing will rise to the top
If homeowners in your hood take a break from the market because they don’t want to bother keeping their properties in show-ready condition over the holidays, that makes for reduced inventory. And that means buyers who are actively searching will be more likely to uncover your listing.

“During the busy spring market, for example, you have way more competition than during the holidays,” Glazer explains. “So you’re much more likely to get your home sold when you’re not competing with more potential sellers.”

2. Your house looks (and smells) amazing during the holidays
With festive greenery, the sweet aroma of cookies baking, and a warm fire in the hearth, you’ve got built-in ambiance—meaning you can appeal to buyers’ senses in a way that you can’t during other times of the year, Glazer says.

“With that nice, homey feeling, homes tend to show a lot better during the holidays, while making people feel really good,” he explains.

Plus, chances are good you’ll tap into some buyer sentimentality: During the holidays, we tend to feel nostalgic about family, home, and memories. That can cause a nesting instinct to kick in—and that often results in a sale, Glazer says.

Don’t go overboard with decorations, though.

“I tell sellers not to put a Santa Claus in every corner; you don’t want clutter,” Lane cautions.

And remember: Buyers need to imagine their furniture in each room, so avoid blocking important selling features such as large windows and fireplace mantels.

And if you live in a colder climate, be sure walkways and stairs are always shoveled clean, and turn your thermostat up before each showing to keep things toasty.

“When you walk in and it’s warm and cozy, that helps in the selling process,” Lane says.

3. Holiday buyers aren’t messing around
Yes, things typically slow down in the weeks leading up to the holidays. But there are still people actively looking for homes and ready to pounce—or those who just entered the market on a short timeline and need to buy fast.

“The people who are out there looking at homes during the holidays are serious buyers,” Glazer says. “And in areas where you have bad weather, these buyers are going to weather the storms—pun intended—to visit your property.”

Potential buyers who take the time to set up home tours during the holiday season are also more motivated to move forward if they like what they see, Lane notes.

“These are not tire-kickers just looking around because it’s fun; those are all weeded out,” she says.

4. Families often search during school breaks
Speaking of serious buyers: Relocating families often capitalize on the holidays as a time to move without tumult on the kids. They want to find the right property, have stress-free negotiations, and get their brood settled before school starts up again in January, Lane says.

“It’s a good time to show your house to people from out of town,” she says.

5. It can be easier to close a transaction in December
Buyers can often get their loans processed and approved faster in November or December than they would in the traditionally busy spring months, says Bill Gassett, a Realtor® with Re/Max Executive Realty in Hopkinton, MA. It all comes down to the holiday slowdown: Fewer home sales are on deck to process, plus lenders are motivated to close deals before the end of the year.

“I’ve seen from personal experience that because of the low volume of business, things move quicker with lenders,” says Gassett, who has been in the business for 31 years.

6. The holidays give you a chance to adjust your selling strategy
If your home’s been languishing on the market for several weeks—or months (eek!)—you might be feeling antsy. Maybe the best solution is to take it off the market and try again after the new year.

Fight the urge! You’re better off staying the course and using this slow time to tweak your selling strategy. Would home staging draw in buyers? Do you need to tackle that paint job you’d been putting off? Should you reassess your asking price?

“Generally, the reason a house does not sell is because it’s not priced right, and if it’s been sitting on the market, nothing will change over a 30-day period if you’re pricing it the same,” Glazer says. “You’re much better off getting the price in line with where it should be, and leaving it on through the holidays.”

Lane recently had clients who wanted to take their home off the market during the holidays and relist in January. She talked them out of it, had several showings, and signed the contract on Christmas Eve.

“I’ve sold more houses in December than in most months,” Lane says. “It’s always a busy month for me.”

 

Posted by Wendy Helfenbaum on realtor.com

Embarrassed by Your Living Room? 6 Fast Fixes to Save Face

AndreyPopov/iStock

Nothing can put a damper on your holiday hosting schedule quite like a living room you’re embarrassed to share with your guests. After all, it’s hard to send out party invites when you cringe at the very thought of letting anyone through your front door.

It’s time to move past those doubts though, because there’s no problem that can’t be fixed in a jiffy—even if it’s just temporarily.

We took your biggest living room concerns straight to the experts, and they came back with some simple fixes that are almost too easy to believe. Follow their advice, and your lackluster living room will be ready to welcome party guests in no time at all.

1. Lack of seating

If finding a place for all those guests to sit in your light-on-furniture living room is giving you a panic attack, take a deep breath.

Nancy Snyder, founder of Bon Brise Design in Chicago, says a solution is easier than you think. Rest assured, your Great-Aunt Dorris will not have to sit on the floor.

“Consider adding a few ottomans or stools. You can also go online and find inexpensive folding stools,” Snyder points out. “After the holidays, any of these can store away easily in a closet, or leave a couple of the ottomans under your console table so that you’re always ready to host another party.

“If adding temporary seating isn’t an option, you can always opt to host a cocktail party instead of a major gathering,” she adds. “For a casual get-together, such as a cocktail party, you don’t need seating for everyone. People will mingle and won’t all be seated at once.”

2. Stains in the carpet

Who knows what those stains in your carpet even are, anyway? Wine? Coffee? Canine? At this point, they’ve literally become a part of the fabric of your home, so much so that you don’t even notice them anymore. That is, unless you have a party in the works. Suddenly, they’re all you can see.

Don’t start taking measurements to have new carpet installed just yet—Snyder suggests cleaning it first.

“You’ll be amazed at the result. Rent a steam cleaner from your local hardware store, or contact a carpet cleaning company and let the pros have a go at it,” she says.

“If that doesn’t do the trick, you could purchase a large area rug and put it right over the carpet,” she says. “Use the rug to define a seating area, but take care that it doesn’t become a tripping hazard.”

3. Cracks or smudges on the walls

Unless your house is brand-new (or maybe even if it is), there’s a good chance you have at least a couple of cracks in your walls. And unless you’ve painted recently, there’ll be smudges galore.

“If you have time to hire a painter, do it! They can fix those cracks and paint away your problems,” says Snyder. “If you can’t do that, then it’s time to get really festive with the decorations. Distract the eye away from the problem areas by creating beautiful, eye-catching seasonal decor like lights. Your guests will focus on that and won’t ever notice the little cracks in your walls.”

You could also break out your best art pieces instead, to give your guests something else to focus on.

“A multisize artwork gallery wall is always captivating,” Snyder adds.

4. Mismatched furniture

If your mismatched living room furniture is giving you stage fright, you’ll love Los Angeles–based interior designer Laura Muller‘s shockingly simple fix: pillows.

“Unify mismatched furniture with continuity. Layer accent pillows in similar neutral tones to pull together different styles,” she explains. Who knew it could be so simple?

5. Torn furniture

Whether the culprit is your kids, your pets, or even yourself, torn furniturehappens. Thankfully, Snyder has a fix that doesn’t involve shopping for a new sectional.

“If the tears aren’t prevalent, well-placed pillows and throw blankets may do the trick,” she says.

If your problem is something a pillow can’t hide, however, she has another solution.

“Slipcovers can work wonders,” she says. “You can go right online, choose the sizes you need, and cover away those problem areas.

“Be sure to follow the instructions for installation, paying attention to the tucking and pinning that will be needed to make them look great,” she adds.

6. Too many toys

If you have kids, there’s a very good chance your living room looks a lot like a playroom, even on its very best days. Muller says there’s no need to start throwing toys in the closets and under beds—just find something pretty to corral them all.

“A trio of beautiful, assorted, oversized deep baskets for toys always work to keep things tidy,” she says.

Posted by Whitney Coy on realtor.com