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Posts Tagged Mortgage loan

Getting Ready to Sell? What to Fix and What to Skip

Thinking of selling your home?  Is now the right time?

That’s the question on homeowners’ minds as house prices just realized their largest annual gain since 2005. Congrats to those no longer “under water” on their mortgages, even as interest rates remain tantalizingly low. But here’s the catch: Those same higher prices can make buyers as choosy as a restaurant reviewer.

“A house with a $1,600 mortgage payment last year now has a $2,000 mortgage payment,” one broker told the Wall Street Journal. “Buyers are saying, ‘I better like it.'”

To increase your home’s “like” frequency, read on to see which upgrades are worth making and which are really not.  You may be surprised.

Worth It: A new front door. Strictly in terms of return on investment, a steel one topped the list of Remodeling magazine’s annual “Cost vs. Value Report for 2014” – recouping 96.6% of the average price. But, a fresh coat of paint can work wonders, too.

Not Worth It
: A home-office remodel. We know what you’re thinking: With so many more people working from home, wouldn’t it be brilliant to rewire the space for electronic equipment, say, and install commercial-grade carpeting? Not really. The magazine gave it the lowest return on investment (48.9%).  According to the study’s administrator, “Home offices don’t sell houses.”

Worth It: A back-up power generator. It’s the biggest gainer in the study, jumping 28% over last year, and plays especially well in areas brutalized by storms.

Not Worth It: Major bathroom work. “You could install the most spectacular jetted tub, and it still might not suit a buyer,” says Patsy O’Neill, a sales associate in Montclair, N.J. “Meanwhile, you’d have spent tens of thousands of dollars.”

Worth It: Roofing replacement. There’s a reason this ultimate “curb appeal” enhancer consistently makes Remodeling’s list and is up 11.2% over even last year: A roof is the first thing prospective buyers notice even before exiting their cars, and you can kiss that sale good-bye if yours looks like it’s been through hell.

Not Worth It: Major kitchen renovations. Again, the key word is “major,” and again it’s an issue of individual tastes.

Source: GAF

Related – Do it Yourself Storage

Related – Is Your Home Staged for Every Season? 

Reprinted with permission from RISMedia. ©2014. All rights reserved.

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Economist: Here’s What You Should Know about the 2014 Housing Market

by Courtney Soinski

housingDo you know what to expect in this year’s housing market?  No matter what you think you know, listen up!  Veteran housing economist David Berson, who previously served as the chief economist at The PMI and Fannie Mae, gives us his professional housing forecast for 2014.

Berson’s first prediction is that 2014 will be the strongest year for housing since before the Great Recession.  With employment growth accelerating and unemployment declining, most economists expect an improved job market in 2014.  In turn, this will improve housing demand this year, even if mortgage rates rise and affordability declines.

Secondly, demographics will begin to favor housing activity.  Housing is most affected by the demographic factor: household formations.  In the years following the Great Recession, people who normally would have lived on their own decided to move in together if they were worried about their job or economic standing.  Now, there is a pent-up demand for household formations.  Berson explains, “Beginning in 2014, the pace of household formations should accelerate to an above-trend pace for several years, pushing up housing demand.”

Lastly, mortgage availability shouldn’t worse and will potentially improve.  Compared with recent years, mortgage availability has slightly increased.  According to Berson, “the increase in new households expected to be created this year, spurred by a stronger job market, should find that qualifying for a mortgage loan will be somewhat easier in 2014 than in prior years.”

 

Source: “Economist: What 2014 Holds for Real Estate,” REALTOR® Mag, Daily Real Estate News, March 20, 2014

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Setting the Record Straight: Top Home Buying Myths

by Courtney Soinski

homebuyingmyths2

Whether you’re shopping for your first home or moving onto the next, the home buying process can be stressful.  There tend to be some common myths in this process, so it’s very important that you’re well informed of what is fact and what is fiction.  We’re here to set the record straight.

Myth #1:  You don’t need a REALTOR®.

Before you bravely take on one of the biggest purchases of your life, remember this: it’s not as easy as it looks. REALTORS® know all the ins and outs of the local area as well as the market in which you’re looking to buy or sell.  Picking up the phone and calling a real estate agent may be one of the best decisions you’ll make.

Myth #2:  The bigger the down payment, the better off you’ll be.

When buying a new home, a buyer’s immediate reflex is to put as much cash down as they can because they’ll borrow less, lower the monthly mortgage payments, and won’t need to buy mortgage insurance.  However, putting 20% down is not a requirement and it’s not for everyone.

Thanks to Federal Housing Administration Loans (FHA Loans), you can put as little as 3.5% down. With this method, you’ll potentially have a lower interest rate, giving you more flexibility. Your money is not all tied up in your house like in a traditional down payment that can leave you with little or no extra cash to spend on home care, improvements, or any other unforeseen circumstances.

Myth #3:  Appraisers set the value of a home.

The role of the appraiser is to produce a credible opinion of value that reflects the current market. Appraisers are not responsible for setting the value of the home and they also do not confirm a home’s sale price.  According to David S. Bunton, President of The Appraisal Foundation, “Appraisers provide an analysis of the collateral so that lenders understand the value of a property when making the loan decision.”

Myth #4:  You need perfect credit.

Most people assume that you must have absolutely golden credit in order to get a loan, but that just simply isn’t the case. If buyers have less than perfect credit, lenders are often willing to work with them to get the best possible loan.

Credit is not the only thing that lenders look at when deciding to approve a loan, but your score will have an effect on the interest rate on your mortgage. Make sure you review your credit report. If any errors are found, they should be reported to the credit reporting bureaus before applying for a mortgage.

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