4 Reasons Why Summer Is a Great Time to Buy a Home!

Here are four great reasons to consider buying a home today instead of waiting.

1. Prices Will Continue to Rise

CoreLogic’s latest Home Price Insights reports that home prices have appreciated by 7% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 5.2% over the next year.

Home values will continue to appreciate for years. Waiting no longer makes sense.

2. Mortgage Interest Rates Are Projected to Increase

Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have increased by half a percentage point already in 2018 to around 4.5%. Most experts predict that rates will rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison, projecting that rates will increase by nearly a full percentage point by this time next year.

An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.

3. Either Way, You Are Paying a Mortgage

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

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

Are you ready to put your housing cost to work for you?

4. It’s Time to Move on with Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.

But what if they weren’t? Would you wait?

Look at the actual reason you are buying and decide if it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer, or you just want to have control over renovations, maybe now is the time to buy.

 

Posted by The KCM Crew

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

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What You Need to Know About Buying a House in Summer 2018

Want more house for your money? Flexibility is in this season.

The sun is high and hot—and so is the competition for buying a home.

Thinking about buying a home this summer? The sunniest time of year is great for exploring new neighborhoods and visualizing future patio parties during viewings. But before you start any serious shopping, it’s important to understand what the housing market is like for buyers right now, and what you can do to end up with the best home—and the best price—for you.

The housing market should be just as strong this summer as it’s been all springExisting home sales and list prices have risen this year, and starter home inventory has plummeted by 14 percent. But there are perks to house hunting right now, too. Here are some facts and tips to help you get the most out of this year’s summer housing market.

Summer Market Facts

  • Prices drop during the summer.

    Summer may be a busy home-buying season, but it’s not as crazy as spring. In fact, prices drop from May through October. If you can hang on until late August, you could find a really great deal—that’s when nearly 14 percent of listings get a price cut.

  • PMI is getting more affordable.

    There’s good financing news, too: Private mortgage insurance (PMI) is getting cheaper after PMI lenders MGIC and Radian lowered their rates this spring.

    “That’s going to cause most of these PMI companies to be competitive, which is going to bring them all down,” Knoxville real estate agent Nic Nicaud says. Because PMI is typically required when homebuyers have a down payment of less than 20 percent, that means it’ll be cheaper for some buyers to get into homes sooner.

Summer 2018 Homebuying Tips

  • Don’t discount older listings.

    When homes are flying off the market within days, it’s easy to think a listing that’s a week or so old is a red flag. Minneapolis real estate agent Danny Dietl says that’s not always the case. In his experience, it’s often because a buyer got cold feet and pulled out of a deal on a perfectly good house. But thanks to the assumptions people make about older listings in busy markets, the delay can cause the price to come down.

  • Consider a fixer-upper.

    In a competitive market, it’s important to be flexible. That could mean going with a fixer-upper, even if you were imagining a move-in ready dream home. There are just more of them out there: The number of starter homes on the market is shrinking, but there are 8.3 percent more fixer-uppers among them than there were six years ago.

    If you’re dead-set against a fixer-upper, Dietl says to be prepared to move quickly. “There’s only ever going to be a couple of options at a time,” he says. “And when new listings come on, it’s going to be pretty ferocious.”

  • Get to know the neighborhood.

    In competitive markets, it’s tempting to make an offer on any available property that fits your criteria, but if it’s in the wrong neighborhood, you may never end up feeling at home in your house.

    Take the time to do some community scouting before making an offer. You might notice convenient parks and new playmates for your kids—or be relieved to find more nightclubs than strollers on your block. You can even find out what your future neighbors have to say about the area with the new What Locals Say feature on listings throughout Trulia.

  • Make the strongest offer—even if it’s not the highest.

    Obviously, now is not the time for low-ball offers. But the strongest offer isn’t always the highest one. Dietl says cash offers are often the secret to a winning bid. “You can even actually be the highest offer by thousands of dollars, and a cash offer may take precedence,” he says.

    Sure, coming up with a cash offer could be tough for many buyers. But there are other ways to make a strong offer that don’t require gobs of money: Including generous contingencies, like a shorter closing or inspection period, and writing a great offer letter can help make your offer stand out.

     

    Posted by Patrick Dunn on Trulia

Are You Ready to Graduate From Renting to Owning a Home?

With graduation season in full swing, many may be pondering a change in their living quarters. Some may be moving out of Mom and Dad’s house into dorms, or maybe out of dorms into their own apartments.

But what if you’re ready to take an even bigger step—moving out of a rental into a home you can call your own?

Buying a house, after all, is a great way to put down roots and build wealth (since homes tend to appreciate so you can sell later for a profit). But purchasing property isn’t a simple process, so you should make sure you’re prepared.

So, how do you know if you’re ready to move from an apartment to a house? Ask yourself these questions below to get a sense of where you’re at—or what you have to do to transition easily into home-buying mode once the time is right.

jacoblund/iStock

Can you afford to buy a home?

For starters, let’s talk money. Buying a home is a hefty purchase, probably the largest you’ll ever make. So, you’ll need a down payment (typically recommended to be 20% of the home’s purchase price) and steady income (i.e., a job) to pay your mortgage.

There are other costs also associated with homeownership:

  • Closing costs (typically 2% to 5% of the home’s purchase price)
  • Home insurance (cost varies by state)
  • Maintenance
  • Utilities
  • Budget for unseen repairs and emergencies

While renting might seem more economical than owning at first glance, that’s not always the case; our rent vs. buy calculator can help you compare the costs. You might be surprised by the results!

Another good first step to figuring out whether you can afford a house is to enter your salary and town of residence into a home affordability calculator, which will show you how much you’d pay for a mortgage on a typical house in that area. Or talk with a loan officer about whether you would qualify for a mortgage, and how much you can spend comfortably. Such consultations are free, and will give you a concrete dollars-and-cents sense of where you stand.

Are you settled in your job?

Your job situation is not only important in terms of income to buy a home, but also whether you’re happy where you work and plan to stay put. Because once you own a home, your career prospects do narrow somewhat, purely because a home anchors you to one area.

“Homeowners tend to have fewer job opportunities compared to renters, since renters can easily accept a job in another city or state,” says Reid Breitman, managing partner at Kuzyk Law, in Los Angeles. “A homeowner may decline such an opportunity because they don’t want to go through the cost, time, and expense of selling their home. So, it may be better to wait to purchase a house until after you’re firmly established in your employment situation.”

Do you know where you want to live?

Since moving once you own a home is not as easy as just packing your bags (which, let’s face it, is a hassle in itself), you really need to make sure you’re picking a home in an area where you’ll be happy.

“It’s not easy to just sell a house and move to a new one if intolerable neighborhood issues come up, since the transaction cost to sell—up to 8% to 10% of the sale price for brokerage feesescrowtitle, and other costs of sale—would be relatively very expensive,” Breitman says. “So you need to really scope out the neighborhood.”

When in doubt, try renting for a few months to make sure you like the area before you start shopping for a home to own for good.

How much home maintenance are you willing to tackle?

If you love the challenge of fixing a leaky faucet and figuring out which shrubs will flourish in your yard, homeownership may be right up your alley. But if the idea of mowing a lawn or messing with the HVAC makes you depressed, then you may want to stick with renting, which gives you a roof over your head without the work.

“Apartment renters don’t have many home-related responsibilities,” explains Brian Davis, director of SparkRental, in Baltimore. “If something breaks, they call the landlord. Often, they don’t even need to worry about setting up utilities; they either come with the building, or the process is merely changing the name on an existing utility account.”

Living in a house you own is a different story. There’s no landlord to call if anything goes wrong; it’s all up to you. So you have to be either adept as a handyman, or willing to find and pay someone else to do such tasks. Or else consider buying a condo or co-op, where the lawns and public areas around your home are maintained by hired help.

Bottom line: Owning a home is a big commitment. So before you jump into it, you should have confidence that it works for your circumstances.

“No one should feel like they have to follow a template, that by reaching a certain age or having a certain number of children they need a house in the suburbs,” Davis says. “So forget the clichés and movies, and decide based on you.”

 

Posted by Julie Ryan Evans on realtor.com

Ready to buy? Visit our website to get started with one of our agents!

3 Tips for Making Your Dream of Owning a Home a Reality [INFOGRAPHIC]

Some Highlights:

  • Setting up an automatic savings plan that saves a small amount of every check is one of the best ways to save without thinking much about it.
  • Living within a budget right now will help you save money for down payments while also paying down other debts that might be holding you back.
  • What are you willing to cut back on to make your dreams of homeownership a reality?

 

Posted by The KCM Crew

Are you ready to find your next home? Visit our website today to get started!

What If I Wait Until Next Year to Buy a Home?

We recently shared that national home prices have increased by 6.7% year-over-year. Over that same time period, interest rates have remained historically low which has allowed many buyers to enter the market.

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

The Mortgage Bankers Association (MBA), Freddie Mac, and Fannie Mae all project that mortgage interest rates will increase by this time next year. According to CoreLogic’s most recent Home Price Index Report,home prices will appreciate by 5.2% over the next 12 months.

What Does This Mean as a Buyer?

If home prices appreciate by 5.2% over the next twelve months as predicted by CoreLogic, here is a simple demonstration of the impact that an increase in interest rate would have on the mortgage payment of a home selling for approximately $250,000 today:

Bottom Line

If buying a home is in your plan for this year, doing it sooner rather than later could save you thousands of dollars over the terms of your loan.

 

Posted by The KCM Crew

Are you ready to buy? Visit our website today to get started with one of our many qualified agents!

House Hunting in One Day: 6 Tips for Maximizing Your Time

asiseeit/iStock

In the ideal home-buying scenario, attending open houses and pinpointing the perfect place is a breeze. But in a seller’s market, finding a home is no small feat, which is why it’s important to make the most of the time you spend touring houses. Since most open houses happen on the weekend, you’ll need to do some prep work to manage your time wisely, so you don’t waste the better parts of your Saturdays and Sundays. We’ve got you covered with these tips to help you make your home search as productive as it can be.

1. Get pre-approved for a mortgage

Do not start touring houses before you are pre-approved for a mortgage. Not only will this crystallize exactly the price range you should be considering, but it will solidify your status as a serious buyer when the time eventually comes to make an offer, says Spencer Chambers, real estate expert and owner of the Chambers Organization in Newport Beach, CA.

2. Clarify which amenities matter most

You won’t be able to zero in on the right property if your wish list is a mile long or too vague. “Make a list of your absolute necessities and another of your wants; together, these will become your guide on which houses you’ll look at, based on the boxes they check,” Chambers says.

Beyond the physical house, brainstorm other variables that will help you narrow down the neighborhood: school district, walkability, proximity to downtown, etc. “Think about what you like to do on the weekend and what you need access to,” says Wendy Hooper with Coast Realty Services in Newport Beach, CA. Do you love dining out? Is a thriving music scene important? Do you need to live in a top-notch school district? “All of these factors help narrow communities quickly,” Hooper says.

Finally, if you’ll be commuting, check out typical drive times during the hours you’ll be on the road, using Google Maps or Waze. “Just because a property is near a highway doesn’t mean you’ll have smooth sailing if the highway is clogged with daily bumper-to-bumper traffic,” Taylor notes.

3. Find a savvy real estate agent

Once you are clear on your parameters, it’s time to start touring these homes. You’ll really want a real estate agent who knows the area. One way to find one is to start perusing listings in your preferred location and see what names keep popping up; they are likely to be the local experts. In many instances, they will be familiar with the homes for sale, and they may even catch wind of homes that are about to hit the market, so you can have a first look.

The goal is for your real estate agent to help you whittle down the list of homes you like online to a handful you’ll tour in person during the weekend.

4. Plan your route wisely

Once you’ve settled on the houses you’ll tour that day, have your agent create an itinerary of the most efficient route to see them. Grouping properties by neighborhood helps clients get their bearings on relative distances and a feel for what each neighborhood offers, says real estate agent Jake Tasharski with Center Coast Realty in Chicago.

However, if you’re short on time, Taylor recommends prioritizing by preference to make sure you’re able to see your top prospects. Or front-load your schedule with the newest listings, since those are the hottest homes that other buyers are eager to tour.

5. Take notes (and photos) as you go

When you are touring many houses in one day, they are naturally going to blend together. To keep them all straight, take plenty of photos—at least one of each room—and take notes of anything you notice, both positive and negative. Spencer also recommends giving each house a nickname, something that stands out to you, so that you can easily remember it.

Remember, this is the time to be judgy. Tasharski encourages clients to eliminate homes as they go by comparing each current home to the previous showing, and to their favorite home so far. “Seeing so many properties in a short amount of time can get overwhelming, so if my client knows a home they just saw isn’t ‘the one,’ we throw that listing sheet away, so it’s out of sight and out of mind.”

6. Block out the last half of the afternoon to revisit your top choices

If at all possible, leave the final hour to revisit your favorite properties. Still have extra time? Get to know the neighborhood. enjoy a snack or cocktail in a local bistro, and soak up your new neighborhood vibe, Taylor suggests. You’ve earned it.

 

Posted by Cathie Ericson on realtor.com

Ready to buy? Visit our website today to start searching for your next home!

Fact or Fiction? 6 Down Payment Myths You Should Stop Believing Immediately

WHYFRAME/Shutterstock

If you’re thinking about buying your first home, that pesky down payment has probably kept you awake more than a few nights. We get it—while a pre-approval is crucial for determining your buying power, it’s the down payment that shows you mean business.

But saving up is hard. In a study conducted by NerdWallet, 44% of respondents said a lack of a down payment was the roadblock keeping them from buying a home.

Making things even worse? Your well-meaning friends and family have probably given you at least one piece of well-meaning, but ill-informed advice, leaving you in more of a blind panic than you need to be.

We’re not saying that saving for a down payment will be a cake walk, but separating fact from fiction can go a long way. Here’s the truth you need to know.

Myth No. 1: You need 20% down

In the NerdWallet study, 44% of respondents also believed you need 20% (or more) down to buy a home. For decades, this was standard, but it isn’t always the case anymore.

“It really depends on the type of buyer you are,” says Robert Garay, a broker associate and team leader of the Garay Groupat Lifestyle International Realty in Miami.

For instance, a Federal Housing Administration (FHA) loan only requires 3.5% down. If either you or your spouse served in the military, you’re likely to be eligible for a Veterans Affairs (VA) loan, which can be approved for 0% down. The same goes for United States Department of Agriculture (USDA) loans.

And if you’re a qualified buyer, you can get approved for a conventional loan with less than 20% down, but there’s a catch: You’ll be on the hook for private mortgage insurance, or PMI. PMI is paid directly to your lender, not toward your principal. Think of it essentially as insurance you pay to prove to the lender you won’t default on your loan.

Myth No. 2: Paying mortgage insurance is smarter than paying a bigger down payment

Perhaps that mortgage insurance seems like a small price to pay in order not to deplete your bank account and win the house. So what if you make some additional payments for a while?

It might not be a big deal, but you’ll want to calculate what you’ll pay in the long run. Take, for example, conventional loans. If you put less than 20% down, you’ll get stuck with PMI, but only until the principal balance reaches 78% or less of the original purchase price.

FHA loans, on the other hand, require mortgage insurance for the life of the loan. That means you’ll be paying an extra monthly fee for as long as you live in the home (or until you pay off the mortgage).

Before you brush off mortgage insurance, compare your options—and know that paying less upfront could mean paying much more over the life of your loan.

Myth No. 3: Cash is king

If you’re shopping in a competitive market, you’ve likely heard horror stories about first-time buyers getting snubbed over investors or all-cash buyers. If you’re working with a loan and a small amount down, it might seem like your chances of getting picked over the other guys are slim to none.

There is some truth to this belief. Cash offers offer one big benefit to a seller: They’re guaranteed to close on time with no loan approval hiccups.

But on the flip side,“That myth assumes that sellers care most about a fast and certain close, and that’s not always true,” says Casey Fleming, mortgage adviser and author of “The Loan Guide: How to Get the Best Possible Mortgage.”

Often, if you make the bigger offer, or you write a killer personal letter that resonates with the seller, you stand a better chance of getting approved over an all-cash offer.

Fleming’s seen it happen: “I’ve actually beat out all cash offers with 10% down because our offer price was a little higher,” he says. “I’ve also had deals where we were competing against a higher cash offer and the seller took ours because the buyers were a young family wanting to raise their kids in the home—and that meant something to the seller.”

Myth No. 4: Down payment assistance is easy!

We hate to burst your bubble—or discourage you from trying to get down payment assistance if you qualify—but finding, applying, and getting approved for help isn’t always easy.

First, there are no national, or even many state-run, assistance programs.

“Pretty much every program is locally run, sometimes by county or even by city,” Fleming says. You can check the Department of Housing and Urban Development’s website for a smattering of state-run “homeowner assistance” options, but you’ll have to do some digging.

And then there’s the other rub. “You have to be under a certain income to qualify, usually the median income in the county,” Fleming says.

Some programs may make special exceptions—say, for single parents—but in general, income is going to be a big factor.

For example, to be eligible for down payment assistance in Grand County, CO, applicants must work a minimum of 32 hours per week in the area and meet income limits. Nevada’s “Home Is Possible Down Payment Assistance Program” has a cap on income, credit score requirements, and the cost of the home bought. In Tamarac, FL, applicants must meet income requirements, wait until an open enrollment period and then get picked from a lottery system.

Still, if you think you might qualify, call your local housing authority office—it can usually point you in the right direction.

Myth No. 5: You shouldn’t put more than 20% down

Let’s say you’re lucky enough to have saved more than 20% down. Odds are good some well-meaning friend is going to tell you to put only 20% down—no more, no less. After all, now that you’ve successfully avoided PMI, why fork over more cash than you have to?

A couple of reasons, Fleming says: First, a higher down payment could signal to your lender that you’re a trustworthy borrower and get you a lower interest rate on your mortgage. Plus, the more you pay upfront, the less you’re borrowing—which means lower mortgage payments.

But you’ll have to put down at least 5% more to see that difference, according to Fleming.

“Your interest rate drops a little more with 25% down, and even more with 35% down,” he says.

Compare your options to see if it makes more sense to pay the extra down or to keep that money in investments that can work for you.

Myth No. 6: You can take out a loan for a down payment

Truth: There’s nothing wrong with getting help with your down payment, but it has to be a gift. If a lender suspects the money might be a loan, repaying said loan will be factored into your mortgage approval amount and you’ll qualify for less than you might have wanted.

In order to prove it’s a gift, you’ll have to get a letter from the gifters, swearing that they don’t plan on asking for the money back. And don’t try to game the system—lying on a mortgage application is a felony.

Dori Zinn contributed to this article.

 

Posted by Angela Colley on realtor.com