Will Your Current House Fit Your Needs in Retirement?

As more and more baby boomers enter retirement age, the question of whether or not to sell their homes and move will become a hot topic. In today’s housing market climate, with low available inventory in the starter and trade-up home categories, it makes sense to evaluate your home’s ability to adapt to your needs in retirement.

According to the National Association of Exclusive Buyers Agents (NAEBA), there are 7 factors that you should consider when choosing your retirement home.1

1. Affordability

“It may be easy enough to afford your home today but think long-term about your monthly costs. Account for property taxes, insurance, HOA fees, utilities – all the things that will be due whether or not you have a mortgage on the property.”

Would moving to a complex with homeowner association (HOA) fees actually be cheaper than having to hire all the contractors you would need to maintain your home, lawn, etc.? Would your taxes go down significantly if you relocated? What is your monthly income going to be like in retirement?

2. Equity

“If you have equity in your current home, you may be able to apply it to the purchase of your next home. Maintaining a healthy amount of home equity gives you a source of emergency funds to tap, via a home equity loan or reverse mortgage.”

The equity you have in your current home may be enough to purchase your retirement home with little to no mortgage. Homeowners in the US gained an average of over $16,300 in equity last year.

3. Maintenance

“As we age, our tolerance for cleaning gutters, raking leaves and shoveling snow can go right out the window. A condominium with low-maintenance needs can be a literal lifesaver, if your health or physical abilities decline.”

As we mentioned earlier, would a condo with an HOA fee be worth the added peace of mind in knowing that you do not have to do the maintenance work yourself?

4. Security

“Elderly homeowners can be targets for scams or break-ins. Living in a home with security features, such as a manned gate house, resident-only access and a security system can bring peace of mind.”

As scary as that thought may be, any additional security and an extra set of eyes looking out for you always adds to peace of mind.

5. Pets

“Renting won’t do if the dog can’t come too! The companionship of pets can provide emotional and physical benefits.”

Evaluate all of your options when it comes to bringing your ‘furever’ friend with you to a new home. Will there be necessary additional deposits if you are renting or moving in to a condo? Is the backyard fenced in? How far are you from your favorite veterinarian?

6. Mobility

“No one wants to picture themselves in a wheelchair or a walker, but the home layout must be able to accommodate limited mobility.”

Sixty is the new 40, right? People are living longer and are more active in retirement, but that doesn’t mean that down the road you won’t need your home to be more accessible. Having to install handrails and make sure that your hallways and doorways are wide enough may be a good reason to look for a home that was built to accommodate these needs.

7. Convenience

“Is the new home close to the golf course, or to shopping and dining? Do you have amenities within easy walking distance? This can add to home value!”

How close are you to your children and grandchildren? Would relocating to a new area make visits with family easier or more frequent? Beyond being close to your favorite stores and restaurants, there are a lot of factors to consider.

Bottom Line

When it comes to your forever home, evaluating your current house for its ability to adapt with you as you age can be the first step to guaranteeing your comfort in retirement. If after considering all these factors you find yourself curious about your options, let’s get together to evaluate your ability to sell your house in today’s market and get you into your dream retirement home!

 

Posted by The KCM Crew

Are you looking for a new home? Visit our website to see all homes for sale in the mid-MO area!

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You DO NOT Need 20% Down to Buy Your Home NOW!

The Aspiring Home Buyers Profile from the National Association of Realtors (NAR) found that the American public is still somewhat confused about what is required to qualify for a home mortgage loan in today’s housing market. The results of the survey show that the main reason why non-homeowners do not own their own homes is because they believe that they cannot afford them.

This brings us to two major misconceptions that we want to address today.

1. Down Payment

A recent survey by Laurel Road, the National Online Lender and FDIC-Insured Bank, revealed that consumers overestimate the down payment funds needed to qualify for a home loan.

According to the survey, 53% of Americans who plan to buy or have already bought a home admit to their concerns about their ability to afford a home in the current market. In addition, 46% are currently unfamiliar with alternative down payment options, and 46% of millennials do not feel confident that they could currently afford a 20% down payment.

What these people don’t realize, however, is that there are many loans written with down payments of 3% or less.

Many renters may actually be able to enter the housing market sooner than they ever imagined with new programs that have emerged allowing less cash out of pocket.

2. FICO®Scores

An Ipsos survey revealed that 62% of respondents believe they need excellent credit to buy a home, with 43% thinking a “good credit score” is over 780. In actuality, the average FICO® scores for approved conventional and FHA mortgages are much lower.

The average conventional loan closed in May had a credit score of 753, while FHA mortgages closed with an average score of 676. The average across all loans closed in May was 724. The chart below shows the distribution of FICO® Scores for all loans approved in May.

Bottom Line

If you are a prospective buyer who is ‘ready’ and ‘willing’ to act now, but you are not sure if you are ‘able’ to, let’s sit down to help you understand your true options today.

 

Posted by The KCM Crew

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!

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!