The Impact of Rising Prices on Home Appraisals

Posted: 01 Jul 2015 KCM CrewThe Impact of Rising Prices on Home Appraisals | Keeping Current Matters

The fact that residential home prices are increasing substantially in most regions of the country is music to the ears of homeowners. However, if you are in the process of selling your home, make sure you realize the major challenge a hot real estate market creates. Each house must be sold twice; once to a buyer and a second time to an appraiser who represents the bank that will grant the purchaser a mortgage to buy the home (unless it is an “all cash” purchase). In a real market with escalating prices, the second sale may be the more difficult. And a recent survey by Quicken Loans reveals that the gap between what a homeowner believes is the value of their home compared to an appraiser is widening.Appraisal vs. Homeowner Value | Keeping Current MattersThis could lead to an increase in the percentage of real estate transactions being challenged by a ‘short’ appraisal (where the appraiser value is less than the contracted price of the home).

Bottom Line

Whether you are a buyer or a seller, you must be prepared for this possibility as it may result in a renegotiation of the price of the home.

Follow Len and Leslie Marma of Success! Real Estate on their facebook business page, “Marshfield Matters” ….. click LIKE to receive real estate info and what’s happening in Marshfield.  They also have a blog entitled,  “MarshfieldRealEstate.wordpress.com” 

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8 Avoidable Mistakes First-time Homebuyers Keep Making

Stop doing these things

Arizona houses

The last thing a first-time homebuyer wants to do is mess up the entire homebuying process by doing one of these common mistakes.

Yet, they continue to make them.

Listen, buying a home is one of the biggest financial decisions a person will make,  and all it takes is one bad or misinformed decision to mess up the entire process.

So, stop.

Movoto complied a list of 10 common mistakes first-time homebuyers make.

After perusing the list, HousingWire condensed the mistakes into 8 things that could ruin the homebuying process:

1. They don’t watch their finances before buying a home

Money clip

This would include watching your credit, taking on too much debt right beforehand or making a big purchase right before closing.

Debt-to-income ratio is a huge deciding factor on credit scores and it’s one of the first things that lenders look at when putting your mortgage together. Lenders want to know how much debt borrowers have already accumulated against their income. The more debt the borrower has, the less of a loan they will be able to get.

Many people don’t realize that lenders look at all financial information again before closing occurs to make sure that nothing has changed. And that debt-to-income ratio that they used to create your mortgage in the first place is one of the first things they’re going back to check. So, hold off on any plans to buy a new car to park in that new driveway or furniture to fill the house.

2. They don’t take the time to get pre-approved before house hunting

It’s easy for homebuyers to assume what they can afford and to just start looking without taking the steps through the lender first, but it’s not the smart move. Most real estate agents won’t show potential homes without a prequalification letter to in hand. And some won’t do anything without the pre-approval. [Go to any mortgage lender and ask about pre-approval.]

3. They take on more than they can handle financially

Many first-time homebuyers make the mistake of assuming that just because they can afford the house that means that they can afford to live there. That’s not always the case. There are many extra costs associated with homeownership that often get overlooked by someone who is new to the game.

4. They get into a fixer upper they don’t have time or money to fix

home improvement

Fixer uppers can often seem like a great savings. Home renovation shows can do that to anyone. The problem is, though, that most people don’t have a production company budget and a huge crew behind them working around the clock to get the jobs done. Without money and time, fixer uppers stay fixer uppers. Not only can the novelty wear off fast, but what seemed like a huge savings quickly starts to look like a giant money pit.

5. They prioritize the home over the neighborhood

When people start looking for that dream home in their dream neighborhood, many realize just how far outside their budgets dream homes can be, especially in big cities and affluent suburbs. It’s tempting to continue to look for that same dream home, just in a neighborhood that might not be as good.

6. They put all their eggs in the online basket

The Internet has become an invaluable tool for home buyers. Searching through homes, researching neighborhoods, getting your credit score, and finding out what lenders are prepared to give has never been so easy. However, it’s still not as good as getting a reputable team of professionals who can physically meet with or at least speak with you in your corner.

7. They spend all their money on the down payment

money tighten

Putting down a 20% down payment on a home is often mandatory these days unless you’re interested in paying mortgage insurance. Many people save and scrape every last dollar they can get together for years in order to meet that 20 percent down payment figure and then as soon as they reach it, they go through the home buying process. Many people empty out their savings in order to meet the down payment, leaving themselves with nothing left over.

8. They skip the home inspection

Skipping the home inspection might seem like a quick and easy way to save money for some people. The novelty and excitement of a new home make some people feel like there’s nothing that would possibly change their minds about wanting to buy it. That is until you’re moved in and realize that there are major and very costly maintenance issues such as mold, termites, a leaking roof, electrical issues or foundation problems

 

Posted in Credit Score, Financing, Home Buying, Home Selling, Homeownership, Market Conditions, Mortgage | Tagged , , , , , | Leave a comment

Mortgage Applications Drop as Interest Rates Rise to 9-month High

Refinancings and purchase apps down

Mortgage applications decreased 4.7% from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending June 26, 2015.

The Market Composite Index, a measure of mortgage loan application volume, decreased 4.7% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 5% compared with the previous week. The Refinance Index decreased 5% from the previous week to its lowest level since December 2014.

The seasonally adjusted Purchase Index decreased 4% from one week earlier. The unadjusted Purchase Index decreased 5% compared with the previous week and was 14% higher than the same week one year ago.

The refinance share of mortgage activity decreased to 48.9% of total applications from 49.0% the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 7.0% of total applications.

The FHA share of total applications increased to 14.0% from 13.9% the week prior. The VA share of total applications decreased to 10.8% from 10.9% the week prior. The USDA share of total applications increased to 1.0% from 0.9% the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.26%, its highest level since October 2014, from 4.19%, with points decreasing to 0.33 from 0.38 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.21%, its highest level since October 2014, from 4.14%, with points increasing to 0.38 from 0.35 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.04%, its highest level since September 2014, from 3.96%, with points increasing to 0.18 from 0.14 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.44%, its highest level since October 2014, from 3.38%, with points decreasing to 0.31 from 0.37 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.09% from 3.04%, with points decreasing to 0.45 from 0.46 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.

Follow Len and Leslie Marma of Success! Real Estate on their facebook business page, “Marshfield Matters” ….. click LIKE to receive real estate info and what’s happening in Marshfield.   They also have a blog entitled, “MarshfieldRealEstate.wordpress.com”

 

Posted in Credit Score, Financing, Home Buying, Home Selling, Homeownership, Market Conditions, Mortgage | Tagged , , , , | Leave a comment

Pending Home Sales Reach Highest Mark in 9 Years

Posted: 30 Jun 2015 KCM CrewPending Home Sales Reach Highest Mark In 9 Years! | Keeping Current Matters

The National Association of Realtors (NAR) recently released their Pending Home Sales Index Report and revealed that it is at its highest level since April 2006. ThePending Home Sales Index is “a forward-looking indicator based on contract signings”. The higher the Pending Home Sales Index number, the more contracts have been signed by buyers that will soon translate to sales. Every region of the country has experienced year-over-year gains in pending sales as seen below:Pending Home Sales by Region | Keeping Current MattersNAR’s Chief Economist, Lawrence Yun cites job creation as a major reason that the housing market has boomed this spring, going on to say,

“It’s very encouraging to now see a broad based recovery with all four major regions showing solid gains from a year ago and new home sales also coming alive.”

Yun went on to caution that,

“Housing affordability remains a pressing issue with home-price growth increasing around four times the pace of wages. Without meaningful gains in new and existing supply, there’s no question the goalpost will move further away for many renters wanting to become homeowners.”

So What Does This Mean To Buyers?

There is a lot of competition out there right now for your dream home. Prices are going to continue to climb, act now before you are priced out of your future home.

What Does This Mean to Sellers?

If you are on the fence about listing your home for sale right now and debating whether now is the time to move on with your plans of relocating… now is the time! There are more buyers that are ready, willing and able to buy their first, second, third, vacation, or investment property now than there has been in years! The supply of homes for sale is not keeping up with the demand of these buyers. Listing your home for sale now will give you the most exposure to buyers and the best sales price.

Bottom Line

Whether you are planning on buying or selling a house this year, waiting to act no longer makes sense.

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Two Graphs that Scream List your House Today

Posted: 29 Jun 2015 KCM CrewTwo Graphs That Scream You Should List Your House Today! | Keeping Current Matters

The spring and summer months have always been known as a very popular time for homebuyers to start the search for their dream home. This year is no different! We all learned in school that when selling anything, you will get the most money if the demand for that item is high and the inventory of that item is low. It is the well-knownTheory of Supply & Demand. If you are thinking of selling your home, here are two graphs that strongly suggest that the time is now. Here is why…

DEMAND

According to research at the National Association of Realtors (NAR), buyer activity this year has far outpaced the same months in 2014. Purchasers who are ready, willing and able to buy are in the market at great numbers.Foot Traffic | Keeping Current MattersAccording to NAR, “Foot Traffic has a strong correlation with future contracts and home sales, so it can be viewed as a peek ahead at sales trends two to three months into the future.”

SUPPLY

The most recent Existing Home Sales Report from NAR revealed that the current supply of housing inventory is at a 5.1 month supply, which remains below the 6-months necessary for a normal market.Inventory of Homes for Sale | Simplifying The Market

Buyer demand is far outpacing the supply of homes available for sale.

Bottom Line

Listing your house for sale when demand is high and supply is low will guarantee the offers made will truly reflect the true value of your property.

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Fast Ways to Stop Energy Drains this Summer

William Asta, Radius Financial

Just because the temperatures are soaring doesn’t mean your energy bills should. Here are some handy tips on how to curb your energy use.

Install a ceiling fan. Yes, it’s old school, but a well-placed ceiling fan creates a “wind-chill effect” that lets you raise the thermostat four degrees without a drop in your comfort level. Find out where to install your fan and how big you need to go to make a differencehere.

Change your air filter. A dirty filter makes your air conditioner work harder. And the simple act of replacing it can lower your system’s energy consumption by up to 15 percent, according to the U.S. Department of Energy. Change the filter at least every three months, but check it monthly. If it looks dirty, swap it out.

Switch out your bulbs. Those pear-shaped bulbs are costing you money. But replacing the five most-used incandescents in your house can save you $75 a year if you pick Energy Star-rated alternatives. Here’s a guide to your choices.

Stop energy drains. Your house is full of electronics that still consume energy even when they’re not in use. How to curb these “energy vampires”? Unplug phone chargers when they’re not in use. Set computers to sleep mode. Plug in groups of electronics (like your TV, game console and cable box) into a power strip that you can turn off, or go with a smart power strip that monitors use and does the job for you.

These are all relatively simple measures that can pay you back with cool savings during hot summer days.

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Home Sales at Best Levels Since 2008

Associated Press, June 26th, 2015

Washington –Purchases of new U.S. homes surged in the Northeast and West in May, as steady job growth over the past year has lifted the real estate sector.  The Commerce Department said Tuesday that new-home sales rose 2.2% last month to a seasonally adjusted annual rate of 546,00, the strongest pace since February 2008.

Follow Len and Leslie Marma of Success! Real Estate on their facebook business page, “Marshfield Matters” ….. click LIKE to receive real estate info and what’s happening in Marshfield.  They also have a blog entitled, “MarshfieldRealEstate.wordpress.com” 

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