Renting vs Buying

renting-vs-buying

As with any major purchase, it pays to be informed prior to making any decisions. As experienced buyers already know, buying a home is a complicated process, so it’s important to start at the beginning and thoroughly understand each step. Whether you’re buying your first home or your third, make sure you have the necessary financial resources and have explored all your options before you purchase a new home.

If you’re a first-time buyer, you should weigh the pros and cons of homeownership versus renting. There are many advantages and disadvantages to consider. For example, renters have the freedom of mobility if they choose to move, but their monthly rent checks do not establish long-term equity or produce any other benefits. And while homeowners’ mortgage payments accumulate equity, these payments are generally higher than rent payments and come with the responsibility to manage the care and upkeep of the property.

Both new and experienced buyers have their own sets of financial considerations when it comes to buying a home. Move-up buyers should evaluate their financial situation to ensure they’re prepared to meet the higher mortgage payments involved with relocating. Likewise, first-time buyers should determine if monthly mortgage payments fit in their budgets. In addition, you’ll need to be prepared to cover the downpayment and closing costs. And, you should consider whether you meet the basic criteria to qualify for a mortgage; lenders prefer that applicants offer a stable job history and a good credit record.

The numbers don’t lie! Here’s a comparison chart you can use to calculate what benefits you at this point, renting or buying. Renting or Buying Chart.

 

Source: http://www.modernorealty.com/2017/01/25/renting-vs-buying/ 

 

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How to lower your mortgage rate when buying a home

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Mortgage rates took a big leap after the presidential election and are continuing to move higher. Demand for homes is strong, but home prices are hitting new highs and affordability is weakening.

For the average buyer who was thinking about getting into a new home last summer, but didn’t, the monthly payment on that same home is now considerably higher. There is, however, a way to lower it by buying down the rate.

“Buying your rate down, or ‘paying points,’ means you’re paying an extra fee on top of standard loan fees like appraisal, underwriting and a credit report to get a lower rate.

Of course that means you have to have more cash upfront. The math isn’t as complicated as it seems. First, a “point” is 1 percent of the amount of your loan, so if you are taking out a $200,000 mortgage, 1 point would be $2,000. Lenders will lower your rate if you pay that point at closing, or, at the start of the loan.

“If you were getting a 30-year fixed loan of $325,000, you might get two options with and without points. Today the option with zero points might show the rate as 4.25 percent, and the option with 1 percent in points – equal to $3,250 – might show the rate as 4 percent,” said Hebron. “Paying $3,250 at closing to lower your rate by .25 percent lowers your payment $42 per month, and lowers your interest cost $68 per month.”

How do you know if you should buy down the mortgage? It’s all about time – how long you expect to be in the home and have that same mortgage. What is the savings? Here comes more math – this time from Matt Weaver, vice president of sales at Finance of America Mortgage.

“We can calculate this figure by taking the dollar value of the buy down and dividing it by the monthly savings from the lower interest rate, then dividing that figure by 12 months. So as an example, let’s say a homebuyer will need to pay $2,000 in buy down to generate $30.00/month in savings. If we divide $2,000.00/$30.00, we would conclude it would take 66.7 months, or 5.5 years, to recoup the cost of the buy down – now you can ask yourself, ‘Do I reasonably foresee myself staying in this home for at least 5.5 years?’ in order to truly capture the return on your investment,” explained Weaver.

Sounds simple, if you have the cash and the time, but buying down a mortgage, as with everything else in housing, carries some risk.

“As they say, ‘A dollar in the present is worth more than a dollar in the future.’ The risk with the uncertainty in length of ownership coupled with the possible need of that same cash for any unforeseen expenses poses a risk for homebuyers considering a buy down,” said Weaver. “The buy-down strategy can be worthwhile with a longer-term view in mind, longer term being defined as seven years or greater.”

The benefits can also vary lender to lender. Shopping for the best rate is always a good plan but even more important when you’re looking to buy down.

“The break-even time on buying down varies from lender to lender and from rate to rate, generally in a range of five-10 years. Look at different combinations of rates and upfront costs side-by-side and see which makes the most sense for you,” suggested Matthew Graham, chief operating officer of Mortgage News Daily. “Heads-up: Some lenders with stricter interpretations of recent regulatory changes no longer allow this flexibility.”

If you really don’t see yourself in the home for more than seven years, or even 10, you might want to consider an adjustable-rate mortgage (ARM). These carry much lower interest rates and can be fixed for five, seven, 10, even 15 years. They were vilified during the housing crash because so many people took them out and then couldn’t afford the payments when they adjusted, but the ARMs of today are not those of years past.

One more thing to consider is the rate itself. Mortgage rates are rising, but they are still near historic lows. If you are really on the edge of homeownership, perhaps you’re a young first-time buyer, then buying down the rate is probably not for you. The odds are you’re going to want to be more mobile, and staying in the home for seven years is longer than it sounds. Bailing out of the home before you expected is a real risk.

“The other risk of buying down your rate is that rates drop after you do so,” cautioned Hebron. “For now that risk is low. The Mortgage Bankers Association is predicting that rates will rise about .375 percent from current levels during 2017.”

While rates are expected to rise, the experts have been wrong before. Rates could just as easily come down and credit availability could loosen up, depending on how the new administration tackles mortgage reform. Rates are also sensitive to global financial markets, which are always a wild card, and especially so now.

Source: Dian Olick-CNBC Real Estate Reporter

http://www.cnbc.com/2016/12/29/rising-mortgage-rates-making-you-nervous-heres-how-to-lower-yours.html

 

How to save your credit through the holidays while buying a home.

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We’re roughly one month away from the beginning of the busiest shopping season of the year. Millions of people will descend on shopping malls and retail websites to buy holiday presents. And while credit scores are not likely at the top of any gift-givers’ priority lists, you’d be surprised just how active those scores might be.

First and foremost, if you apply for a new credit card or higher spending limits on existing cards for the holiday season, the card issuers will probably request your credit score from one or more of the national credit reporting companies (CRCs), Equifax, Experian and TransUnion. The same is true if a new car is on your shopping list or if you choose to open a store credit card account. Just as they would at any other time of year, those score inquiries from lenders can cause a dip in your credit score.

The shopping-season strategy here is twofold: You want to maximize your score before applying for this holiday-related credit, and you want to avoid having these holiday loans lower your score in advance of any major borrowing you may be planning in the early months of the new year.

Since you want to get the best available borrowing terms on any new loans you seek for the holidays, you should try to get your credit score as high as possible before applying for credit. Ideally that means you’ve got your outstanding card balances as close to zero as possible and at 30 percent or less of their spending limits. Ideally, it also means you’ve allowed a few months of timely payments to pass since the last time you applied for credit, since inquiry-related score drops typically rebound within a few months, as long as you continue making your payments on time.

Conversely, if you plan to seek major loans in the spring (e.g., if you’re considering a new home or car purchase in spring or early summer), be aware that your holiday-season borrowing could keep your credit score from being in peak condition when you apply for those loans.

So, what do you do? There are several ways you can protect your scores during the holiday season to avoid any inadvertent negative score impact.

Credit scoring systems will consider and potentially penalize you if you have too much credit card debt appearing on your credit report, so the goal is to prevent holiday debt from showing up on your credit reports. Here’s how:

Any part of a new outstanding balance that you pay off before it appears on your monthly statement will never appear on your credit reports. So log in to your credit card account and make a payment before the Statement Closing Date, which is almost always exactly 21 days before your due date. If you do this routinely, you can get the convenience and safety of using credit cards for holiday shopping without hurting your credit score.

If you start using that trick before the holidays, you’ll be rewarded with a higher credit score in the new year. Think of it as an early resolution.

Source: Vantage Score

 

Link: http://www.modernorealty.com/2016/11/01/how-to-save-your-credit-through-the-holidays-when-buying-a-home/

 

 

 

Fall home improvements for less than $500

home-improvements

Homeowners can add to the resale value of their home before selling their home.

As the seasons change the weather gets colder, more homeowners begin to turn their thoughts to the coming winter, and the preparations their homes might need to get through it comfortably.

Although there are a lot of expensive upgrades and improvements that owners could do on their homes this fall, there are also several others that can have just as big an impact on comfort, energy efficiency and how well the property will hold up through the coming months that will cost a lot less.

These fall home improvements all cost less than $500 and will still give homeowners and sellers a lot of bang for their buck.

1. Insulate the attic

The vast majority of homes today are under-insulated, leading to higher energy bills, colder interiors in the winter and hotter interiors in the summer.

And even in homes that do have adequate insulation, it’s important to remember that older insulation does break down over time, and it may become displaced by rodents, pests or workman, all of which can reduce its efficiency.

Insulation often tops the list of things homebuyers like to see because it means they’ll have lower utility bills, while staying more comfortable year round.

Adding the insulation before the cold weather sets in, when homebuyers have it in mind and are questioning the utility bills, gives it a chance to shine during the home inspection, while at the same time allowing the seller to recoup a whopping 116.9% of the costs at time of resale, which is an extremely attractive selling point.

Project timeline estimate: DIY homeowners can tackle this project over a weekend. Hiring a pro to handle the job can get it done in less than one day.

Cost: The average cost of insulating an attic is around $400.

Money saving tips: Invest in batts that don’t use fiberglass, and have them installed DIY to save on labor costs. Purchase the highest R-value insulation available to allow the new homebuyers to save more on their energy bills going forward and to get the best ROI.

2. Put in storm windows

Once the warmer days are over, cool air starts seeping in around your existing windows and doors. This is due to an air gap that is present in many homes, which can account for a loss of as much as 40% of the energy used to heat the home.

Putting up storm windows before a home is being shown will eliminate drafts and make it more comfortable for buyers walking through.

Best of all, according to Energy.gov, installing them will save the homeowners 12% – 33% of their energy costs, while installing any new windows can help recoup as much as 73% of the cost at time of resale, which means that this simple project can help them save, while making a better impression on buyers at the same time.

Project timeline estimate: It takes just a few hours to put up storm windows all around the home, seal them in and insulate them.

Cost: The cost of installing storm windows is around $275.

Money saving tips: Install storm windows in the draftiest rooms to make them feel more comfortable for buyers walking through.

3. Seal an asphalt driveway

Tiny cracks that appear in the driveway over time both detract from the house’s curb appeal and can lead to big holes and bigger expenses if left alone over the winter.

The cooler fall days are the perfect time of year to seal an asphalt driveway because the lower temperatures both mean that the asphalt will cure more quickly and that the VOCs and scent it gives off will be lower and less likely to put off homebuyers.

Having the seller seal up these cracks now means that there won’t be major pot holes showing up in the spring after the freeze-thaw cycles are complete, and it means that the driveway will look fresh, attractive and likely to increase curb appeal for the whole property.

Sealing the driveway protects it, which in turn helps it maintain its value; failing to seal the driveway means that the property could lose value over the winter when the damage is done.

Project timeline estimate: It takes about three to four hours to seal a driveway, and another one to two days for curing.

Cost: The cost to seal a driveway is around $200.

Money saving tips: Tackling this job DIY will get the biggest ROI and save money in the process.

4. Hydroseed the lawn

The cool nights and warmer days of fall make it the perfect time of year to seed a lawn. Grass seeds grow and take root better in cooler weather, so sowing new seed at this time of year will create a richer, fuller lawn in the spring.

Hydroseeding is one of the least expensive ways to seed a lawn, nourishing it for the coming winter months. It can be done DIY by the seller as well, as a way to cut costs

Improving the landscaping and lawn of a property can have an impact of as much as 20 percent of the value of the home, making this a smart fall decision. The landscaping is also one of the first things a buyer sees, which makes it an important part of the home’s curb appeal.

Project timeline estimate: Hydroseeding takes a few hours to a full day depending on the size of the lawn.

Cost: The average cost to hydroseed a lawn is $0.50 – $1 a sqft.

Money saving tips: Seed the lawn DIY to save the most. Fertilize at the same time to add additional nourishment and ensure that the grass grows properly.

5. Install an electric fireplace

As the weather turns cooler more people begin spending time indoor, which can lead some people to begin thinking about cozy, warm spaces, such as rooms with built-in fireplaces.

Electric fireplaces are clean, energy efficient additions to any home that will add instant visual appeal and warmth at the same time, something that both the buyer and the seller can appreciate.

They range from plug-in units to built-in features so it’s easy to find one that fits the room’s decor, and the seller’s budget, easily.

And according to realtor.com, adding any working fireplace, including electric and nicely kept mantel to a home can add as much as $12,000 to the home’s value, which makes it attractive to current homeowners and new buyers alike.

Project timeline estimate: Plug-in electric fireplaces can be installed in just minutes, particularly if there is an existing firebox. Otherwise, they can be built into a wall or alcove in one to three days.

Cost: The average cost to install an electric fireplace is around $300.

Money saving tips: Opt for a plug-in unit to save the most on building or installation fees. Use an existing fireplace to convert.

As chilly weather sets in, it’s important to leave an impression of a warm, cozy home that’s welcoming to everyone that enters.

Upgrading and improving a home to include these features, doesn’t need to break the bank either; to find out more about what things cost, be sure to visit the cost guide.

Source: Yuka Kato, Fixr.com

Link: http://www.modernorealty.com/2016/10/26/fall-home-improvements-for-less-than-500/

 

 

 

What are the biggest mistakes homebuyers make?

homebuyer-mistakes

Some homebuyer seem to make constant mistakes when buying a home. In the world of seasoned Real Estate Agents, we have seen all the mistakes this group of homebuyers have made.

Here’s a list of homebuyer mistakes we have seen through out our career and still homebuyers regularly make today.

Mistakes that homebuyer make.

  1. Not talking to lender first.
  2. Making new, big purchases while home shopping, (for example, new cars)
  3. Paying to much attention to online home valuations.
  4. Looking at too many homes.
  5. Getting too emotional.
  6. Not knowing the neighborhoods where they’re looking.
  7. Setting an unrealistic timetable.
  8. Relying on a friend or family member for appraisals, inspections and other needs.
  9. Looking at homes beyond the price range.
  10. Skipping an inspection.
  11. Offering to little for properties.
  12. Putting to much trust in the listing agent.
  13. Choosing the wrong agent.
  14. Waiting to long to make an offer.
  15. Overpaying for a house.
  16. Looking in the wrong location.

By learning the correct information you can avoid making these mistakes when buying your home. Reach out and pick our brain, there are no wrong questions, we are here to help you through the home buying process.

Link: http://www.modernorealty.com/2016/10/19/what-are-the-biggest-mistakes-homebuyers-make/ 

6 things that’ll sell a home faster.

Exterior house

Often, what helps a home sell faster is also what helps a home sell for more.

Surprisingly enough, just having a low price isn’t the key. Homesellers need to think of their property as a product – something to market – instead of home. When they do, the result will be a fast sale at a great price.

1. Stage the yard

The first thing people see when driving up to a home is the yard. Parking at the curb, hence the term “curb appeal,” buyers make an instant determination of how desirable a home is by how it looks. First impressions are everything, right?

A beautiful front yard makes a good impression that should continue when potential buyers walk in the house.

Remove weeds, rake leaves, trim hedges and anything else to clean it up. Then, you can work on staging the yard.

Anything new including plants, grass or mulch will always brighten up a yard. Keep a realistic budget in mind, and skip the major projects (such as a new driveway) unless absolutely necessary.

2. Clean, clean, clean!

The power of a good cleaning job, inside and out, can’t be emphasized enough. Start outside the house after staging the yard. Pressure washing the walls and cleaning the windows is a good start. 

If repainting is being considered, try cleaning first to see how the home looks. Often just removing dirt is enough to brighten the home’s look.

Inside the home, homeowners need to get into every corner and crevice to remove dust, grime or dirt. The places people will be most impressed by the work are the kitchen and bathrooms. The more “new” the house looks, especially in those rooms, the better the impression on buyers.

Why all the hard work? Buyers like move-in condition and will pay more for it.

3. Remodel or upgrade?

The best returns come from the smallest improvements; new trim (door and window casings, baseboard, crown molding), new paint and new flooring all create a fresh new look around the home at minimal cost.

Stepping up from that includes upgrading appliances, fixtures (lights, faucets, etc.) and replacing windows. These will all make the home look newer and nicer, which helps the home sell faster.

Major remodeling, such as replacing the kitchen or bathrooms, should only be considered if necessary. Although doing major upgrades will help a home sell faster, the time it takes to do the upgrades could be long.

4. Declutter and stage the home

All the “little stuff” sellers have around their house, including collectibles and photos, should be put away.

After that, look at each room and see whether there are extra pieces of furniture that could be removed. The key to decluttering is, less is more.

Buyers want to see large rooms where they can visualize living there. The more stuff they have, the harder it is to visualize.

Decluttering makes rooms feel larger, which makes the home more appealing to buyers.

Staging is often ignored or dismissed by agents as not important, most often because of cost. However, buyers and sellers, and their agents, all feel that staging increases the value and appeal of a home.

Equally important is how well a staged home shows in photography. As with curb appeal, the better the home looks inside, the faster it will sell.

5. Use professional photography and marketing

Use a professional photographer and produce professional marketing materials with the high-quality photos. All too often consumers don’t question the quality of the photos used to market the home.

With over 90% of buyers doing their home shopping online, professional photos are essentially attracting more buyers and selling the home faster and at a better price.

Good marketing makes a huge difference in how buyers see a home. Professional photos will be seen by buyers through the MLS and consumer real estate portals. All of which are designed to get buyers to fall in love with and buy the home.

6. Price effectively

A good agent will analyze recent sales and select a price that is designed to entice buyers to make offers. Pricing a home is not like pricing a car or TV. What the buyer ultimately pays is rarely what the list price is.

In most markets, the best strategy to attract the most buyers is to price just a bit low. This frequently results in multiple offers, competitive bidding and a fast sale than at a high price.

The reason this works is that the lower price makes the home visible to more buyers and appears to be a bargain. When this pricing strategy is combined with all the steps mentioned above, buyers see a beautiful home in excellent condition at a great price. Of course, they want to write an offer!

Make it happen!

Ultimately, the three key factors in making a home sell faster are cleaning and/or remodeling, staging and professional marketing. As a homeowner, doing all three will maximize both the speed of selling but also price. Although pricing is absolutely critical, the price offered by buyers will be driven by the other three points.

Source: InMan News

Link: http://www.modernorealty.com/2016/08/03/6-things-that-ll-help-sell-a-home-faster/ 

 

 

 

 

Improving Curb Appeal

Curb Appeal

Updating landscaping and improving curb appeal of a home gives prospective homebuyers an immediate positive impression. In fact, Texas Tech Universety Reaserchers found that improving a home’s curb appeal can increase its value by as much as 17% in a study earlier this year.

Curb appeal improvements can be as simple as adding furniture to a front patio or updating the front and garage door. Another essential and fairly simple update for home sellers is adding modern and stylish lighting outdoors, which is especially important during the late fall and winter months when more buyers are visiting at night time.

Lawn Starter recently compiled the 50 largest metros in the U.S., measuring the amount of local professionals in lawn care and landscaping as well as local home price trends.

Miami-Fort Lauderdale ranked no. 1 in Lawn Starter’s study,

To come up with the scores, Lawn Starter measured eight different factors, which were weighted equally and combined to come up with a final score.

  • Painters per 1,000 jobs
  • Roofers per 1,000 jobs
  • Real estate professionals per 1,000 jobs
  • Lawn care specialists per 1,000 jobs
  • Landscape architects per 1,000 jobs
  • Handymen per 1,000 jobs
  • Home price increases annually from Q4 2014 to Q4 2015

Miami had an overall score of 7.93 out of 9. Annual prices increased 7.9%, and the city has a consistently high number of works that can help improve a home’s curb appeal. Orlando, Jacksonville and Tampa-St. Petersburg also made the list.

Riverside-San Bernardino ranked no. 9 on the list with an overall score of 6.43, and San Francisco-Oakland ranked no. 10 with an overall score of 6.35.

Other than Denver and Seattle, all the cities that made the list are known for their warm or mild weather year-long. This trend is pretty unsurprising given outdoor work is available all throughout the year instead of a few select months.

Even in areas of the country that have easy access to professionals that can do the work for home sellers, you may still feel reluctant. Here are a couple of simple tips to improve curb appeal that can be done on your own.

Go beyond green

It’s simple: add some flowers. Colorful perennials and annuals are a quick and simple way to add a bit of vibrancy to a yard. Go with whatever is in season. Flowers can either be planted right into the ground, or to add a bit of dimension and texture, home sellers can use planters.

Clean it up and keep it simple

Yards with a lot going on may appeal to some homeowners, while others immediately see the amount of time, work and money that go into its upkeep. Make sure your home sellers are aware that even though they love yard work, not everyone does.

When picking flowers, plants and shrubs to add to the landscape, keep in mind the amount of work that will be needed to keep up during the home selling process and for the new buyers.

Source: InMan News

Improving Curb Appeal