Categories
Buying

Should I Buy Now? Or Wait Until Next Year? [INFOGRAPHIC]

Some Highlights:

  • The cost of waiting to buy is defined as the additional funds it would take to buy a home if prices & interest rates were to increase over a period of time.
  • Freddie Mac predicts interest rates to rise to 5.2% by the third quarter of 2019.
  • CoreLogic predicts home prices to appreciate by 5.1% over the next 12 months.
  • If you are ready and willing to buy your dream home, find out if you are able to!

Posted by The KCM Crew

 

Categories
Buying

The Cost of Renting vs. Buying a Home [INFOGRAPHIC]

Some Highlights:

  • Historically, the choice between renting or buying a home has been a tough decision.
  • Looking at the percentage of income needed to rent a median-priced home today (29.2%) vs. the percentage needed to buy a median-priced home (15.8%), the choice becomes obvious.
  • Every market is different. Before you renew your lease again, find out if you can put your housing costs to work by buying this year!

Posted by The KCM Crew

Categories
Buying

Do You Know the Real Cost of Renting vs. Buying? [INFOGRAPHIC]

Some Highlights:

  • Historically, the choice between renting or buying a home has been a close decision.
  • Looking at the percentage of income needed to rent a median-priced home today (30%), vs. the percentage needed to buy a median-priced home (15%), the choice becomes obvious.
  • Every market is different. Before you renew your lease again, find out if you could use your housing costs to own a home of your own!

 

Posted by The KCM Crew

Categories
Buying Uncategorized

Renters: Are You Ready to Buy a Home?

While you save up your down payment, take these 5 steps to get you closer to closing.

For renters planning to buy a home, preliminary steps like creating a budget and saving for a down payment are obvious. Here are five more advanced steps toward moving out of your rental and into a dream home of your own.

Understand the full cost of homeownership

As a renter, a single rental fee covers your monthly housing payment. But as a homeowner, four main factors go into your monthly housing payment: principal, interest, taxes and insurance (P.I.T.I.). Understanding these costs will help you determine how much house you can afford.

Together, principal and interest comprise your monthly mortgage payment, with the principal paying down your loan balance each month, and the interest paying your fee for borrowing the money. Use a mortgage calculator to determine how much of your payment goes toward principal versus interest each month.

Taxes refer to property taxes, which are assessed by the county you live in. They average 1.2 percent of your home’s value each year.

Insurance — paid to a homeowner’s insurance company of your choice — is required when you have a mortgage. Lenders require that your insurance cover the cost of rebuilding the home if it is ruined by fire or other disaster. This “replacement cost” is determined by your insurer, and must be agreed to by your lender. Insurance will typically cost $700 to $1,200 per year for a single family home.

For condo owners, there’s a fifth monthly cost category: homeowners association (HOA) dues. These fees cover common area amenities, landscaping, ongoing upkeep and reserves for future maintenance like roof replacement or exterior painting. These monthly dues range from $100 for cheaper condos to $1,000 or more for luxury condos.

Single family home buyers can take a useful cue from HOA budgets, which generally require that at least 10 percent of dues go toward reserves. Even if you’re not buying a condo, it’s a good idea to set up a similar savings plan for future maintenance like replacing a roof or major appliances.

Know your homeowner tax benefits

Mortgage interest and property taxes are deductible when you file your annual tax returns, and reduce taxable income.

These deductions significantly lower your cost of homeownership. For example, for a $300,000 home with 20 percent down and a 30-year fixed mortgage at 4 percent, monthly P.I.T.I. is about $1,545. Tax deductions reduce this total housing cost to about $1,215.

Study rent-vs.-buy math

Often, people judge the cost of renting vs. buying by comparing P.I.T.I. to a rental payment. But to get an apples-to-apples comparison, you actually have to look at after-tax-benefit homeownership costs and rent costs.

Using the example above of a $300,000 home that costs $1,215 per month after taxes, you could compare this residence to a home that rents for about $1,200. If the $300,000 home was more spacious or in a more desirable area, the math would seem to favor buying — but don’t forget this example requires a $60,000 down payment.

Identify mortgages that fit your budget and timeline

If you don’t have 20 percent to put down, you can still get a mortgage with as little as 3 percent down. However, if your down payment is less than 20 percent, you’ll have to pay mortgage insurance, which is about .85 percent of your loan amount, and isn’t tax deductible.

Your monthly P.I.T.I. (which includes mortgage insurance) is about $1,995 on a $300,000 home with 3 percent down and a 30-year fixed mortgage at 4 percent. After tax deductions, this total housing cost drops to about $1,614. And you’d only need $9,000 for the down payment.

You can also lower your rate and P.I.T.I. with a shorter-term loan like a 5-year ARM, but rates on these loans will adjust in 5 years, so you risk having a much higher payment if you plan to stay in the home longer than that.

Start preparing your credit score now

Credit scores are critical for getting the best mortgages with the lowest rates. Lenders want reliable on-time payment history as well as credit depth.

More credit accounts are better, so renters with only one credit card should consider obtaining more credit. Just note that your credit score can drop 5 to 15 points when you first open a new account, then will come back up when you’ve established a good payment history.

Have questions about purchasing a home? Check out our Home Buyers Guide.

Posted by Julian Hebron on Zillow

Categories
Buying

Is Your Dream Home Out of Your Price Range? There’s Hope Yet

Serp77/iStock
Serp77/iStock

From the moment you walked in, the house was calling to you. That chef’s kitchen! The ballroom-size playroom! Wait a second, is that a fireplace in the master? Done and done. This is your perfect home…

That is, until you recheck the price and discover it’s just a bit out of your price range. Cruel, cruel world!

There are precious few things in life more exciting than finding your true dream home—and not many things more soul-crushing than realizing you can’t afford it. Or, can you? If you’re determined to stretch your budget the way certain presidential candidates stretch the concept of “sarcasm,” there are ways to pull off this monetary magic without becoming completely house poor.

We’ll show you how to make your budget mesh with your fantasy. For real.

Budget saver No. 1: Negotiate the price

“Everything is always negotiable,” says Chantay Bridges with TruLine Realty in Los Angeles. “You’d be surprised at what sellers, agents, and buyers alike will compromise on.”

You might not get what you want, but you never know—the seller may be extremely motivated because of a move, work relocation, or divorce, for example.

“They may just be looking for a fair offer and would be willing to sell to you for a little less if they can close faster as a result.”

You’d be amazed by how many people make no effort to parley on price. Smart haggling can get you far! Do it.

Budget saver No. 2: Work the programs

There are a wide variety of programs, particularly down payment assistance programs, that help people achieve their dream of homeownership. And contrary to popular belief, you don’t necessarily have to be low-income to quality.

“You may discover a first-time home buyers program that can make your home of choice more affordable by providing assistance with the closing costs or the down payment,” says Bridges. Check with your lender on programs available in your county, since they change frequently. (You can also review some of the state-by-state options.)

What’s that you say? The home is a dream in terms of neighborhood and square footage, but a nightmare on the inside?

If you’re considering a fixer-upper, you can look into financing it with a renovation loan, suggests Sarah Valentini, president and co-founder of Radius Financial Group. “This will enable a home buyer to make desired improvements and have them financed into the mortgage.”

Budget saver No. 3: Massage that mortgage

“The biggest mistake I see a majority of people make is blindly asking for a 30-year fixed mortgage,” Valentini says. Many home buyers, especially millennials, would be better off if they considered other options such as a five-, seven-, or 10-year adjustable-rate mortgage, she says.

“We live in a much more transient society than we did 20 years ago, and people all too often pay for the ‘security’ of a 30-year fixed loan when, in fact, they will likely be selling or refinancing in less than 10 years,” she adds. Looking into a different loan type can translate into lower payments upfront.

Home buyers can also look into creative options for their private mortgage insurance (e.g., having it paid by the lender or seller), which can help you achieve a lower monthly payment.

Budget saver No. 4: Check for ways this home itself could save you money

Sometimes that more expensive house payment will allow you to save in other areas. For example, maybe it makes your commute shorter and less expensive, or it’s in a better school district so you no longer have to foot expensive private school tuition, says Realtor® Jose Tijam with Grand Avenue Realty & Lending in Anaheim, CA.

Another possibility: The energy efficiency of a newer home can reduce your utility bills and might make up some of the cost difference of an older home.

“Sometimes a higher-priced home can actually cost the same as a lower-priced one when you do the math on other factors,” Valentini says.

Budget saver No. 5: Put the decision into perspective

On the one hand, you don’t want to be dumb. “If a home is truly out of my clients’ budget, I would emphatically advise them to continue looking,” Valentini says. However, she adds that while it is never advisable to buy more than you can afford, it is important to consider all factors before passing on a dream home.

“Buying a home is not something to take lightly,” she says. “You will likely live there for quite some time, so it is important not to just settle,” especially if there are ways to get creative and make it work.

Tijam notes that if your dream house is, say, $25,000 over your ideal budget, it may seem like a huge chunk of money. However, the sting is lessened when you imagine that amount spread over the life of the mortgage.

“When you do that math on a 30-year mortgage, it ends up being only roughly a $70 monthly increase, and often my clients find they can make adjustments to accommodate the difference.”

While he respects the initial budget that his clients have set, he says, he can relate to his clients who have fallen in love with their dream home but find it unaffordable.

“My family and I found a home we adored, but it was slightly over our budget,” he recalls. “We hesitated—and once we figured out that we could probably make it work, another buyer had made an offer. It’s something we still think about from time to time, and I share this experience with the people I help.”

Posted by Cathie Ericson on realtor.com

Categories
Buying

4 Reasons to Buy This Summer!

Summer is here! The temperature isn’t the only thing heating up right now, so too is the housing market in many areas of the country! 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 Index reports that home prices have appreciated by 5.9% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 5.3% over the next year. The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report projects home values to appreciate by more than 3.2% a year for the next 5 years.

The bottom in home prices has come and gone. 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 remained around 4%. Most experts predict that they will begin to rise over the next 12 months. The Mortgage Bankers Association, Freddie Mac & theNational Association of Realtors are in unison, projecting that rates will be up almost 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

As a paper from the Joint Center for Housing Studies at Harvard University explains:

“Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”

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 whether 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.

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

Posted by The KCM Crew

Categories
Renting Uncategorized

City or Suburb? 10 Rentals Offering the Best of Each Locale

Whether you want to live in the bustling heart of the city or the laidback ‘burbs, these rentals offer something for everyone (and at less than $2,000 a month).

If you’re looking for a rental in a major metropolitan area, you’ve got plenty of options. One big decision you’ll need to make is whether to live in the city proper or one of its suburbs. The city offers the allure of adventure, the opportunity to live without the extra cost of car, and often a shorter commute to work. Meanwhile, the suburbs may provide lower rents, larger spaces, and easier access to nature.

These rentals compare what you can get for $2,000 in five major cities and one of their more suburban areas.

Los Angeles, CA

1304 W 2nd St, Los Angeles, CA
For rent: $1,883/mo

City1

This apartment community is a yoga lover’s dream, offering free classes along with a pool and fitness center. Its Westlake location a short distance from Echo Park and downtown means you have plenty of chances to walk to your nearest adventure. This one-bedroom features a balcony and a large living space within a historic building.

Find more Los Angeles rentals.

Burbank, CA

401 N Pass Ave, Burbank, CA
For rent: $1,960/mo

City2

This community offers plenty of ways to enjoy staying close to home, with ample space for hosting outdoor gatherings, plus a barbecue pit, outdoor lounge and pool. The stylish one-bedroom includes laminate flooring throughout and ample kitchen space, as well as a stackable washer and dryer.

See additional Burbank rentals.

Washington, DC

3460 14th St NW, Washington, DC
For rent: $1,937/mo

City3

This Columbia Heights apartment community is a pedestrian’s paradise, with easy access to the Metro station and some of the most interesting neighborhoods in the area. An urban oasis, this one-bedroom provides a sleek interior with accent walls and a balcony.

See more Washington, D.C. rental listings.

Alexandria, VA

3001 Park Center Dr, Alexandria, VA
For rent: $1,979/mo

City4

This spacious two-bedroom home offers an elegant take on apartment living, with views of Washington D.C. and plenty of outdoor space for your favorite furry friend. The community features a full tennis court, access to conference rooms, shared grounds equipped with water features, a courtyard and a game room.

See more rentals in Alexandria.

Denver, CO

1451 24th St, Denver, CO
For rent: $1,975/mo

City5

If you love America’s favorite past time, you’ll be thrilled to live in this community of modern lofts. Located in the Five Points neighborhood, this rental is within walking distance of a Coors Field. The two-bedroom home features granite countertops, high ceilings and exposed ducts. A central sundeck features the largest community pool in the city, and you can burn off those beer calories in the expansive fitness center.

Explore more Denver rentals.

Aurora, CO

23680 E Easter Dr, Aurora, CO
For rent: $1,770/mo

City6

Sweeping mountain views await at this ranch-style community complete with a playground, movie theater and large party room. The two-bedroom home offers a fireplace, balcony, and built-in bookshelves.

Discover more Aurora rentals.

Dallas, TX

2828 Lemmon Ave, Dallas, TX
For rent: $1,733/mo

City7

Take in the city skyline from this spacious one-bedroom apartment, featuring a kitchen island, laminate flooring and built-in work space. Living in the center of the exciting Uptown neighborhood means you’ll be steps away from many chic hangouts. When you want to stay close to home, you can lounge by the large pool or soak in the spa.

See more Dallas rentals.

Euless, TX

900 Grange Hall Dr, Euless, TX
For rent: $1,515/mo

City8

Along with spacious interiors, sleek finishes and modern architecture, you’ll have plenty of storage within this two-bedroom unit, which includes a walk-in closet well suited for the most enthusiastic fashionista. The expansive grounds boast a large pool along with a dog park.

View more rental listings in Euless.

Salt Lake City, UT

338 E South Temple, Salt Lake City, UT
For rent: $1,799/mo

City9

Social butterflies will enjoy floating above the city while taking in mountain views from the rooftop lounge. This two-bedroom in the Lotus neighborhood offers granite countertops, sleek black appliances, and an in-unit washer and dryer. After a long day, you can get to know you neighbors in the community’s 18-person hot tub.

See more Salt Lake City rentals.

West Valley City, UT

3810 S Redwood Rd, West Valley City, UT
For rent: $905/mo

City10

For those who seek peace and quite without having to sacrifice modern amenities, this two-bedroom boasts 1,000 square feet and commuter convenience. A business center allows you to finish up last-minute projects, and you can enjoy a game of basketball on the community court. You”ll look forward to coming home to your furry friend before heading to the extended dog park.

Discover your next West Valley City rental.

Looking for more information about renting? Check out our Renters Guide

Posted by Emery Desper on Zillow

Categories
Renovation

5 Things You Didn’t Know About Home Renovations

Ready to remodel? Add these facts to your toolkit first.

Do it yourself, home renovation and construction concept with DIY tools, hardware and swatches on wooden table, top view; Shutterstock ID 272784122; PO: Cat Overman; Job: blog post
Shutterstock ID 272784122; PO: Cat Overman

Home renovations are so shiny and attractive on the surface that it’s hard to imagine the ways they can go terribly wrong. But before you can enjoy the finished result, you’re likely to hit a few bumps in the road.

Here are five things you may not know about home renovations. They just might help you make decisions that keep you from regretting your DIY efforts.

You may need a permit (and getting one will take time and effort)

Every town has its own rules, but most major work (such as taking down walls, installing fences, updating plumbing and electrical systems, and cutting in new doors and windows) will require a permit.

With certain permits come the even-more-exciting inspections process. If you’re DIYing, it can take quite a bit of research to figure out exactly what permits you need and how to go about getting them. Hiring a contractor can take some of the sting out of the process.

Depending on your town, the rules may still require the homeowner, not the contractor, to obtain the permit, but a pro will be more familiar with the system and can help steer you in the right direction.

Improvements may not pay off

Most homeowners think they are instantly adding to their home’s resale value by upgrading and remodeling. But out-pricing the market with fancy interiors is going to cost when they try to sell their home.

For better chances of recouping your costs, stick with the going range of the neighborhood. Certain home improvements are almost guaranteed to bring a good return-on-investment when selling a home. These include updating bathrooms and kitchens, which are always important to buyers.

You might also consider finishing the basement and adding a bathroom. Neutral finishes and standard appliances are your best bet for resale value.

Hiring a professional may be cheaper

When it comes to number-crunching, a professional might actually come out cheaper in the long run. Make sure to do your homework and get a few quotes before committing to doing it yourself.

Don’t forget to include the intangibles: your own time, energy, interest, and skill levels, as well as how long you can live in a work zone.

If you do it yourself, you may be getting into costs you didn’t anticipate, such as equipment rentals, bribing friends to help, and needing to take time off work. Any home improvement project — DIY or professional — is likely to go over-budget, so either way, factor in at least 10-percent overages.

Good contractors book months out

No one ever tells you this when you’re strolling down the aisles of the latest bathroom fixtures, dreaming of relaxing in your new spa tub by the end of the month. Sure, some contractors are available right away. But that means they aren’t booking jobs. Good contractors will be booked months out, so be sure to schedule accordingly.

Aside from being well-booked, how can you tell a contractor is a “good” one? Be sure to get recommendations from friends and family. Ask potential contractors for a list of past clients and current projects, and inspect the work they’ve had done, if possible.

Of course, make sure the contractor is licensed, bonded and insured by asking for proof.

Finally, don’t forget to ask about subcontractors and who they work with, and research those names as well.

Reusing materials may cost more

Trying to be conservative with materials can be a pricey proposition. Many home owners ask contractors to try to be stingy with materials, but this will end up costing much more in time. It’s usually less expensive to cut into a new 2×4 than to pay the contractor the extra time it will take to reuse one.

The same goes for repurposing old or salvaged materials. They require extra TLC, and your contractor and team are a well-oiled machine. So if you’re hoping to repurpose old, salvaged, or extra materials for the job, be sure to lay out these expectations ahead of time — and be aware of the extra cost.

Posted by Natalie Wise on Zillow