Whether You Rent or Buy, Either Way You're Paying a Mortgage!
There are some people who have not purchased homes because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize, however, that unless you are living with your parents rent-free, you are paying a mortgage – either yours or your landlord’s.
As Entrepreneur Magazine, a premier source for small business, explained in their article, “12 Practical Steps to Getting Rich”:
“While renting on a temporary basis isn’t terrible, you should most certainly own the roof over your head if you’re serious about your finances. It won’t make you rich overnight, but by renting, you’re paying someone else’s mortgage. In effect, you’re making someone else rich.”
Christina Boyle, Senior Vice President and head of the Single-Family Sales & Relationship Management organization at Freddie Mac, explains another benefit of securing a mortgage as opposed to paying rent:
“With a 30-year fixed rate mortgage, you’ll have the certainty & stability of knowing what your mortgage payment will be for the next 30 years – unlike rents which will continue to rise over the next three decades.”
As an owner, your mortgage payment is a form of ‘forced savings’ which allows you to build equity in your home that you can tap into later in life. As a renter, you guarantee the landlord is the person building that equity.
Interest rates are still at historic lows, making it one of the best times to secure a mortgage and make a move into your dream home. Freddie Mac’s latest report shows that rates across the country were at 4.22% last week.
Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore, now may be the time to buy.
First-Time Homebuyers: Your Time Is Now
How do you select the members of your team who are going to help you make your dream of owning a home a reality? What should you be looking for? How do you know if you’ve found the right agent or lender?
The most important characteristic that you should be looking for in your agent is someone who is going to take the time to really educate you on the choices available to you and your ability to buy in today’s market.
As Dave Ramsey, the financial guru, advises:
“When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman.”
Do your research. Ask your friends and family for recommendations of professionals whom they have used in the past and have had good experiences with.
Look for members of your team who will be honest and trustworthy; after all, you will be trusting them with helping you make one of the biggest financial decisions of your life.
Whether this is your first or fifth time buying a home, you want to make sure that you have an agent who is going to have the tough conversations with you, not just the easy ones. If your offer isn’t accepted by the seller, or they think that there may be something wrong with the home that you’ve fallen in love with, you would rather know what they think than make a costly mistake.
According to a Consumer Housing Trends Study, millennials have already started to prefer a more hands-on approach to their real estate experience:
“While older generations rely on real estate agents for information and expertise, millennials expect real estate agents to become trusted advisers and strategic partners.”
Look for someone to invest in your family’s future with you. You want an agent who isn’t focused on the transaction but is instead focused on helping you understand the process while helping you find your dream home.
In this world of Google searches, where it seems like all the answers are just a mouse-click away, you need an agent who is going to educate you and share the information that you need to know before you even know you need it.
“Top 10 Loan Programs You Should Know” 1/11/2016
1. Declared Income Loans: Yes,
that means NO tax returns.
2. Asset Depletion Loans: Income can be derived from Retirement and Investment accounts.
3. To Be Determined Underwriting: No property yet? No problem, get a formal approval in advance. A True Loan Commitment!
4. Foreign National Program: Borrowers live and work with income out of the Country? This is not a problem.
5. Litigation: Many lenders can still do this with no issue.
6. FHA FICO scores: As low as 580 and VA Loans to $1,500,000
7. Non Occupying Co Borrowers Allowed: Family can co-sign with one another.
8. Jumbo Loans to Unlimited Amounts: Direct Connection to Wall Street. We have no maximum loan limit.
9. Purchase Money Piggyback Loans: Eliminate Mortgage Insurance
10. Private Money and Swing Loans: There are sources to make your deal work before the borrower sells their home.
Plus 1 more… Reverse Mortgage.
Real Estate for the Real World
|Is Flipping Still a Thing|
| The glory days of house flipping seem to be on the wane. Why, there are even fewer flipping shows on cable TV these days. What’s happening in the market, and how does that benefit you? |
For starters, house prices have risen, and it’s harder to flip a more expensive home. Well, harder to make it worth the investment of time and money usually required to take a run-down property and turn it around. Houses that are flipped are usually bought at a very low cost, but they usually need a huge amount of work, and not just the cosmetic changes. Many homes that are flipped need extensive repairs and renovations.
With more homes now on the market in desirable neighborhoods than there were just a few years ago, getting a good return on the investment is much more difficult for flippers. When homebuyers don’t have to fight over property, and don’t have to take whatever’s available in a desirable area, flippers may not make enough profit to make the investment worth their while.
More houses to choose from may also mean they’re not selling as quickly. When houses are sitting on the market for longer periods of time, the investors are losing money. They have to carry the mortgage, insurance, taxes, and maintenance costs of each house they’ve flipped, while paying for their own residence as well. The longer the property sits, the more that comes out of the investor’s pocket. This is a real discouragement to would-be flippers.
Market watcher RealtyTrac has reported that the number of flipped houses across the nation has declined steadily since mid-2013. At the same time, the gross profit on flips has also declined, making flipping a less attractive means of investing in real estate.
So what does this mean to you? For the average homebuyer, this could mean you’re not competing against cash buyers all the time. If you are interested in a home that needs updating and you have the cash and the skills to do the work, fewer flippers is a good thing for you as a buyer. You can buy an older house that’s been well maintained and is in generally good condition, but crying out for updating. Cosmetic changes to the kitchen and bathrooms will be less expensive than a brand new house [and a good investment].
But don’t get complacent and think you have plenty of time: There are signs that interest rates are going to be rising soon. While that discourages home flippers, it also means that you’ll be getting less home for the money. As your choices broaden and it becomes easier to find the home you want in an neighborhood you like at a price you can afford, you will need to weigh those benefits against the quite real possibility that your home could cost you much more in the months — or even weeks — to come.
Take advantage of the fact that cash-paying flippers aren’t dominating the market anymore. Contact me today to get started on your loan pre-approval, and get ready to start shopping!
Article by Leslie O'Neal
Affordability Remains a Serious Concern for SoCal Millennials
This is creating a bidding frenzy for investors still in the market looking for good investments. Investment properties are receiving multiple cash offers.
Foreclosure Inventory Plunges 33%
Foreclosures are quickly drying up in many markets. Foreclosure inventory dropped 33.2 percent, while completed foreclosures fell 22.5 percent in January year-over-year, according to CoreLogic’s January 2015 National Foreclosure Report.
In January, 43,000 completed foreclosures occurred nationwide, down from 55,000 one year earlier. That also represents a 63 percent decline compared to the September 2010 peak in foreclosures. Foreclosures have fallen every month for the past 39 consecutive months.
"Job growth and home-value appreciation have worked to push the serious delinquency rate to the lowest since mid-2008 and foreclosures down by one-third from a year ago," says Frank Nothaft, chief economist at CoreLogic. "With economic growth in 2015 expected to be better than last year, further declines in both delinquencies and foreclosures are projected for this year."
Still, the foreclosure crisis isn’t over yet. In January, about 549,000 homes remained in some stage of foreclosure – compared to 822,000 homes in January 2014. The foreclosure inventory comprised 1.4 percent of all homes with a mortgage in January.
"The foreclosure inventory continues to shrink with declines in all 50 states over the past 12 months," says Anand Nallathambi, president and CEO of CoreLogic. "Florida, one of the hardest hit states during the foreclosure crisis, experienced a decline of almost 50 percent year over year, which is outstanding news."
Where Foreclosure Inventories Remain High
The following areas saw the highest foreclosure inventory (as a percentage of all mortgaged homes) in January:
- New Jersey: 5.2%
- New York: 4%
- Florida: 3.5%
- Hawaii: 2.7%
- District of Columbia: 2.5%
Meanwhile, the five states with the lowest foreclosure inventory in January were Alaska (0.3%); Nebraska (0.4%); North Dakota (0.4%); Arizona (0.5%), and Montana (0.5%).
5 States With Highest Foreclosures
Five states accounted for nearly half of all completed foreclosures nationally. These states posted the highest number of completed foreclosures for the 12 months ending in January 2015, according to CoreLogic’s report:
- Florida: 111,000
- Michigan: 51,000
- Texas: 34,000
- California: 30,000
- Georgia: 28,000
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