4 Important Reasons Why You Should Consider Buying A Green Home

4 Important Reasons Why You Should Consider Buying A Green HomeBuying a home is one of the most important decisions you can make. There are many decisions involved in choosing the right home from picking a real estate agent, to figuring out what type of home will suit your needs. You want the right sized rooms, a floor plan that fits your family, and certain home features you know you can’t live without.

With all the decisions you have to make surrounding your new place to live, you may want to consider buying a green home. Green homes can be a little more expensive up front, but over time they can save you money and pay for the upgrades. These are several reasons for deciding to buy a green home.

Air Quality And Health

Green homes are built with better air quality in mind. The materials used to build green homes improve the indoor air quality of your home. Furthermore, green homes are built to encourage indoor plant growth. Plants help clean our indoor air and reduce pollution and are an essential part of any green home.

Saving Water

Green homes are also built to conserve water. Buying a green home will cause you to use 30%-50% less water than in a conventional home. Conserving as much water as possible has become more important now than ever before and purchasing a green home can help you use less water.

Use Less Energy With A Green Home

Everyone would love to save money on their heating and electric bills. With a green home, you can do exactly that. Green homes use nearly 30% less energy and have over 30% less greenhouse gas emissions. This translates to savings on your utility bills every month.

Increase The Resale Value Of Your Home

A home isn’t only a place to live, but it’s also an investment. Purchasing a green home can be viewed as a wise investment, as many people consider green homes appealing. They’re attractive for their many cost saving and natural features, besides offering more sustainable living. For these reasons, your green home may increase in resale value.

There are many direct benefits to you by purchasing a green home. Not only do they help the environment, but they are good for your health and your energy bills. Consider making your next home a green home.

If you are in the market for a green home in your area, be sure to contact your trusted mortgage professional for financing options and a pre-approval.

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Newest Home Pricing Data Shows Homes Becoming More Attainable Across The Country

Newest Home Pricing Data Shows Homes Becoming More Attainable Across The CountryCase-Shiller’s 20-city home price index for September reported the lowest pace of year-over-year home price growth in almost two years. Lower home prices balanced housing markets between sellers and buyers, but home prices continued to grow approximately two times faster than wage growth.

Case-Shiller’s 20 city home price index for September posted a home price growth rate of 5.20 percent as compared to August’s year-over-year growth rate of 5.70 percent. While analysts expected slower rates of home price growth, they weren’t expecting the steep declines seen in September’s report.

David Blitzer, Chairman and CEO of the S&P Dow Jones Indices Committee, said “Home prices plus data on house sales and construction confirm the slowdown in housing.”

Las Vegas Holds on to Top Spot in Home Price Growth

Las Vegas, Nevada had the highest pace of home price growth with a year-over-year reading of 13.50 percent; San Francisco, California posted a year-over-year home price growth rate of 9.90 percent. Seattle, Washington held third place in year-over-year home price growth with a reading of 8.40 percent.

Las Vegas home prices, while leading the 20-City Home Price Index, remained 20 percent lower than their peak. Nine cities saw home prices decline in September as compared to August; Seattle, Washington posted a negative home price growth reading of -1.30 percent from August to September.

The National Association of Home Builders reported the third consecutive quarterly decline in the number of Americans expecting to buy homes within the next twelve months. As demand for homes declines, home prices are expected to fall as inventories of available homes rise.

These conditions will soften the impact of strong buyer competition and skyrocketing home prices common in recent years, but home prices remain unaffordable in many areas.

Home Buyers Deal with High Home Prices

Home buyers are finding ways to adjust their home searches to get around affordability issues. A recent survey by the National Association of Home Builders indicated 61 percent of home buyers would continue looking for a home they could afford.

40 percent of buyers said they would expand their search areas and 23 percent of responding home buyers said they would look for homes older or smaller than they originally planned to buy.

As always, contact your trusted real estate professional to discuss the latest activity in your local market.

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5 Strategies Millennials Can Use To Buy Homes

5 Strategies Millennials Can Use To Buy HomesMillennials face numerous challenges when buying their first homes. 55% of young adults between 25 and 34 years old don’t own homes as compared to 80% in 1967, according to data from the Census Bureau. 

Buying a home is tough with the $1.4 trillion student loan debt, growing childcare expenses and rising rental costs. However, hope is not lost. Millennials can realize the quintessential dream of owning a home. 

Millennials can employ several strategies to plan for home ownership without selling their kidneys. Here are five ways to do just that. 

Develop A Realistic Budget 

Now is a great time to examine your finances and create a budget for a house you can really afford. Lenders may be able to approve you for a larger loan amount than what you thought possible. Therefore, it’s imperative to be realistic when deciding on the amount of home mortgage payment you can afford comfortably per month.   

Make Sacrifices 

Not long ago, someone said (and probably regretted) Millennials can’t save enough to buy homes because they are spend extravagantly. Well, saving thousands of dollars for down payment isn’t easy, but it’s not impossible either. And there are many low to no down payment programs available if you check with your trusted mortgage professional first.

You may have to sacrifice and cut unnecessary expenditures such as buying new outfits and even getting a new car. Living minimally can help pad your personal savings to propel you into owning a house. 

Consider The Suburbs 

Although it’s vital to stay near family and a lively social location, consider purchasing a house in a suburban area, where houses are typically more affordable. Plus, if you have pets they will love the larger lots and yards giving them space to play.

You can choose a less populated state where you will probably have a higher chance of affording a home. Although this may not be ideal, if owning your own place tops your list, then location will not stand in the way. 

Use State And Federal Programs 

The Federal Housing Administration (FHA) gives home buyers the chance to purchase houses with a very low down payment. This lower amount is quite attainable if you save toward this goal.  Some states also offer supplemental programs beyond the FHA program. Find out whether you can access extra grants and subsidies. 

Get Your Hustle In Gear 

Although most millennials struggle with unemployment, if you have one job, look for other ways to make extra dollars. You may consider driving for rideshare services, freelance gigs and running errands for people as a way to temporarily boost your earning potential.

Owning a place to call home is great. Like anyone else millennials can buy homes. Talk to a home finance expert and your trusted mortgage professional for more information on how you can make your best investment. 

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3 Things You Need To Know About Divorce And Homeownership

3 Things You Need To Know About Divorce And HomeownershipDivorce can be an incredibly emotional and financially stressful time. Questions about what happens to assets and the family home add to the anxiety. Each state has divorce laws that differ and that can complicates decision-making.

For example, marital assets are distributed differently in community property states from equitable distribution ones. The idea of 50-50 splits may be a myth because judges have the discretion to deviate from even percentages. That being said, these are three things you should know about homeownership when contemplating divorce.

Who Gets The House?

This often ranks as the biggest question among divorcing spouses. Many years ago, it was assumed that the wife automatically gets the marital home. But laws have changed, and same-sex marriages don’t bring a difference in gender to the process.

These days, marital homes are generally subject to either community property divisions or equitable distribution. That means the court will either split it 50-50 or weight the equity in one person’s favor for a specific reason.

In divorces that include minor children, the parent who enjoys primary custody may be given an opportunity to remain in the home. This is often done by spouses agreeing to that solution. It’s also not uncommon for a court to order the home to be sold after children reach the age of majority.  

Risks Of Co-Ownership After Divorce

Continuing to maintain joint ownership after divorce presents certain risks. In all likelihood, there will be a mortgage attached to the property and failure to make timely payments by either party puts both credit histories at risk. If one person falls on hard financial times, a court-ordered liquidation may be necessary. On the other hand, the other owner may have to foot all the bills to protect their credit rating.

Another risk associated with joint ownership is that the person living in the home may not adequately maintain it. Homeowners are all too familiar with ongoing maintenance and repairs. The home could end up losing value due to negligence. Although joint ownership has its child-rearing and potential value appreciation benefits, it can be risky.

When A Home Is Not A Marital Asset

Although states take different approaches to divide assets in a divorce, not everything is included in the so-called “marriage.” There are a number of items that are usually considered separate and apart from the marriage such as personal items, tools of a trade, pre-marital assets, and most importantly inheritance.

It is not uncommon for people to inherit a family home from parents or other loved ones. That property may not constitute a marital asset unless steps are taken to merge it.

For instance, putting a spouse’s name on the deed or leveraging its equity for a joint purpose may be considered co-mingling it with marital assets. However, if it remains separate and apart from the marriage, chances are that it will not be on the table for distribution during the divorce.   

Homeownership and equity are handled differently from state to state. It’s important to speak with a legal professional about your unique situation. 

If you are in need of assistance to refinance your current property, your trusted mortgage professional is ready to help.

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What’s Ahead For Mortgage Rates This Week – December 3rd, 2018

What’s Ahead For Mortgage Rates This Week – December 3rd, 2018Last week’s economic news included readings from Case-Shiller Home Price Indices, sales of new homes and pending home sales. FHFA increased maximum loan limits permitted for mortgages held or guaranteed by Fannie Mae and Freddie Mac. Weekly readings for mortgage rates and first-time jobless claims were also released.

Case-Shiller Indicates Slow-Down in Home Price Growth

Home prices slowed their growth in September according to Case-Shiller. David Blitzer, CEO and Chairman of S & P Dow Jones Indices, said “Home prices plus data on house sales and construction confirm the slowdown in housing.

Rapidly rising home prices have sidelined new and moderate-income home buyers; slim inventories of homes for sale and recently rising mortgage rates also squeezed options for home buyers.

Home prices grew at a seasonally-adjusted annual rate of 5.70 percent in September as compared to 5.70 percent during August. September’s reading was the lowest in nearly two years, but remains close to twice the growth rate for wages.

Las Vegas, Nevada held first place for home price growth with a seasonally-adjusted annual growth rate of 13.50 percent. San Francisco, California followed with a year-over-year growth reading of 9.90 percent. Seattle, Washington held third place for home price growth with a year-over-year reading of 8.40 percent.

New and Pending Home Sales Dip in October

The Commerce Department reported s fewer sales of newly-built home in October to 544,000 sales as compared to September’s reading of 597,000 sales of new homes. Analysts predicted a reading of 589,000 sales for October. Home sales slow as winter weather and holidays approach, but higher mortgage rates also caused the dip in sales.

Pending home sales are sales where a purchase offer is made, but the sale of a home has not closed. Pending home sales were -2.60 percent lower in October as compared to 0.70 percent growth in September. The National Association of Realtors® reported an October index reading of 102.1 as compared to September’s reading of 104.8 in September, which represented a 2.60 percent decline in contract signings. This was the lowest reading for contract signings since June 2014.

Mortgage Rates, Higher Loan Limits and New Jobless Claims

Freddie Mac reported mixed results for average mortgage rates; Rates for 30-year fixed rate mortgages were unchanged at an average of 4.81 percent; rates for a 15-year fixed rate mortgage averaged one basis point higher at 4.25 percent and the average rate for 5/1 adjustable rate mortgages was three basis points lower at 4.12 percent. Discount points averaged 0.50 percent for 30-year fixed rate mortgages, 0.40 percent for 15-year fixed rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

The Federal Housing Finance Agency announced higher loan limits for home loans owned or guaranteed by Fannie Mae and Freddie Mac. The maximum loan amount for conforming mortgages was raised 6.90 percent to $484,350. The maximum loan amount for mortgages in high priced counties will be based on 150 percent of the $484,300, which is $726,525.00.

New jobless claims were higher last week with 234,000 new claims filed. Analysts expected 220,000 new claims based on the prior week’s reading of 224,000 first-time claims filed.

Whats Ahead

This week’s economic news releases include readings on construction spending and labor sector reports on public and private sector job growth. The national unemployment rate will be released along with weekly readings on mortgage rates and first-time jobless claims.

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Home Buying Power Remains In Motion Depsite Rising Mortgage Rates

Home Buying Power Remains In Motion Depsite Rising Mortgage RatesThe real estate market does not occupy a space outside the laws of physics. As Sir Isaac Newton so aptly theorized, “For every action, there is an equal and opposite reaction.” When applying the English physicist’s Third Law to today’s rising mortgage rates, anticipating the reaction can be valuable information if you are planning to buy or sell a home or commercial property.

At first blush, residential home buyers and commercial property investors might expect the “opposite” reaction to impact buying power negatively. The initial data might lead many to believe that premise.

How Home Buyers Reacted To Rate Hikes

According to Realtor.com, the average cost to American mortgage holders increased by 15.8 percent from Sept. 2017 to Sept. 2018. In dollars, that totaled about $223, reportedly from $1,413 to $1,636 when considered against the median home at $294,900. That so-called reaction seems to indicate a loss of buying power for everyday homeowners.

Naturally, these increases were higher in top real estate markets with New York at $545 increase and Seattle at $533 where the median home costs $529,900 and $550,045 respectively. The top 20 housing markets incurred a total 68 percent of the increases year-over-year. Compounding the reaction to rising rates, many pundits are claiming the Fed’s rate hikes are creating stock market volatility.

All of these numbers seem to indicate a gloomy opposite reaction to mortgage rate increases. Or do they?

Real Estate Market Remains In Motion

Much of that thinking stems from looking at increased costs as if they somehow prohibit home buyers from making purchases. But the very fact that Americans are purchasing homes and paying somewhat higher monthly mortgage premiums indicates people enjoy the required buying power. Yes, rates have increased since the Great Recession, but that was always the plan.  

Keep in mind that Newton has a few other applicable laws of physics as well. For example, “A body in motion remains in motion.” The Fed’s decision to finally raise rates was held back by a sluggish recovery. Today’s robust economy has prompted the long overdue interest rate hikes, but they are still quite low.

If, for example, mortgage rate increases resulted in a stagnant housing or commercial real estate market, that might be considered an adverse reaction. However, single-family homes and investment properties are in high demand.

That should indicate that the booming economy has improved buying power ahead of mortgage rate increases. Simply put, Americans seem to be ahead in the real estate game.

For everyday families interested in starter homes, homeowners eyeing a more substantial property or commercial investors looking to get into the market, a smart equal and opposite reaction to rate increases may be to get in quickly and enjoy today’s low rates before the next planned increase.

Be sure to consult with your trusted mortgage professional for your best financing options.

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NAHB Reports Lowest Builder Confidence Reading Since 2014

NAHB Reports Lowest Builder Confidence Reading Since 2014Obstacles facing home builders have caught up with high builder confidence according to the National Association of Home Builders Housing Market Index for November. Builder confidence dropped eight points to an index reading of 60, which was the largest month-to-month drop in builder confidence since 2014. November’s decline in builder confidence was greater than the largest month-to-month decline during the housing crisis.

Housing Market Index readings over 50 are considered positive, but analysts said that long-standing headwinds caught up with home builders’ outlook on housing market conditions and sub-categories used to comprise the overall Housing Market Index reading.

Obstacles Impacted November Home Builder Confidence in Housing Market

Builders have long cited shortages of buildable lots, rising materials costs and labor shortages, but builder sentiment appeared strong until November. Recent tariffs on building materials and rising mortgage rates further added to builder concerns. Buyer traffic indicated that would-be home buyers may be waiting for home prices and mortgage rates to fall. Less demand for homes would increase inventories of homes for sale and potentially reduce extreme buyer competition that caused rapid price gains in high-demand metro areas.

Components of November’s NAHB HMI also declined in November. Builder confidence in current housing market conditions fell seven points to an index reading of 67. Builder confidence in housing market conditions within the next six months dropped ten points to 65. The reading for buyer traffic in housing developments dropped eight points to 45. Readings for buyer traffic seldom exceed the HMI index reading of 50.

NAHB Housing Market Index: Things to Know

Housing and mortgage industry pros view the HMI as an early indicator of construction pace and for measuring supplies of homes for sale. The National Association of Home Builders HMI is based on survey of NAHB members; the sample size varies according to the number of responses received from builders each month. Analysts noted that November’s reading was impacted by fewer builder responses in November; 315 responses were received in November as compared to 360 builder responses in October. Fewer responses increase the volatility of index readings.

Approaching winter weather typically reduces home construction and plans for new construction; 2018 has seen natural disasters and catastrophic wildfires that destroyed many homes. While these factors did not impact November’s home builder confidence, readings they will likely affect home builder confidence readings in the coming months.

If you are looking to buy or refinance, your trusted mortgage professional is ready to help you identify your best financing options.

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Mortgage Challenges For Self-Employed Home Buyers

Mortgage Challenges For Self-Employed Home BuyersIt’s no secret that mortgage lending institutions look favorably on steady paychecks and positive debt-to-income ratios. That can leave many self-employed prospective home buyers feeling anxious about getting approved for a mortgage. But just like the 9-to-5ers who get regular paychecks, self-employed people earning a good living can get approved with a little due diligence.

The primary concern of mortgage lenders is not necessarily where your revenue comes from, it’s confidence that you can meet the monthly obligations. A lender probably wouldn’t see a significant difference between someone who was paid every two weeks and another paid monthly. Why should a self-employed earner be any different? While there are differences, that doesn’t necessarily have to be a bad thing.

Self-Employed Mortgage Applicants Face ‘Different’ Scrutiny

When reviewing a self-employed person’s mortgage application, the lender can expand their consideration to items related to your business. Factors such as stability, longevity, location, and viability are issues that can come into play.

This type of review mirrors that of steady paycheck earners in terms of length of employment, history of layoffs and other potential revenue setbacks. There really isn’t a higher standard for self-employed mortgage applicants. You enjoy a different professional life, and the process reflects those differences. That being said, there are a number of things you can do to put your best foot forward toward mortgage approval.

Strengthen Your Self-Employed Mortgage Application

First and foremost, every mortgage applicant must be able to demonstrate an ability to meet the monthly payments on paper. There is no way around the debt-to-income ratio. And although many self-employed people exercise some lifestyle flexibility in terms of tax deductions, your numbers have to prove you can take on a mortgage. That being said, there are important items you may want to consider when applying for a home loan.

  • Revenue Stability: Volatile swings in revenue are not generally persuasive. Lenders tend to like steady and positive growth reflected in your business and personal earnings.
  • Tax Returns Matter: This can be particularly problematic for people who find creatively legal ways to make revenue tax exempt. Home offices and company cars can lower your taxable income, but they also reduce your ability to pay the mortgage, at least on paper. Plan ahead by strategically filing strong earned-revenue tax returns.
  • Consistency Matters: There are a few ways to demonstrate consistency. It can be level monthly earnings or multiple years of tax returns in the same business. Your income may only be considered if it fluctuates in a way that frightens lenders.
  • Good Credit: Some cash-oriented people tend to discount the value of credit scores. The adage that “cash is king” may apply to the down payment, but a poor credit history can hurt your chances with lenders. Think “credit is king” when applying for a home loan.

Being self-employed does not mean you are at a strategic disadvantage when applying for a mortgage. But keep in mind that the home loan review can be slightly different. As always, your best next step would be to consult with your trusted home mortgage professional to go over your personal situation.

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Buy Or Build Your Home? 5 Factors To Consider

Buy Or Build Your Home? 5 Factors To ConsiderA home is one of the biggest investments you can make, and the American Dream for many. Most people spend significant time finding or designing their “dream home.” The first decision is whether to buy or build. 

As of September 2018, the average sales price of a new home was $377,200, according to joint data collected from the U.S. Census Bureau and the Department of Housing and Urban Development. Existing homes sales price was approximately $258,100, according to the National Association of Realtors. 

New homes attract bigger prices than existing ones, meaning building costs are also high. So, how do you decide what is best for you?

Here are five factors to consider. 

Time 

Building a home takes time since you must complete several phases. You must buy land, find an architect to design, get building permits, find a contractor and start building. It can take between six months and a year before you move into your new home. 

Buying an existing home shortens that time. For a new house, you can move in once the escrow closes. Older homes may require renovations, but it won’t take long. 

Home Design 

Building your home gives you the benefit of customization. Working with your architect, you can design your dream home to reflect your taste and preference. Buying an existing home, means you may have to compromise on a few aspects. 

Energy Efficiency 

Rising energy costs is a concern to potential homeowners. Designing your own home means you can incorporate measures to be energy efficient. Buying an old home may require more resources to upgrade. That might end up hitting your wallet harder. 

Fortunately, most homebuilders are responding to market demands for energy efficient homes. Most new homes meet these standards. 

Budget 

Budget is an important consideration when buying or building your home. Buying price reflects the value of the house. Your real estate agent will probably give you payment options. 

Building, on the other hand, means you have to juggle a budget constantly throughout the construction period. It is not uncommon to spend more than you budgeted for initially. 

Even if you decide to find a perfect existing home, you may finally opt to build. Conversely, you may strategize to build and later choose to buy an existing home. In both cases, working with qualified professionals such as a trusted mortgage lender, real estate agent or a builder can make the process seamless.

 

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What’s Ahead For Mortgage Rates This Week – November 26th, 2018

What’s Ahead For Mortgage Rates This Week – November 26th, 2018Last week’s economic readings included readings from the National Association of Home Builders Housing Market Index, National Association of Realtors® report on sales of pre-owned homes and Commerce Department readings on housing starts and building permits issued. Weekly reports on mortgage rates and first-time jobless claims were also released.

Housing Market Challenges Catch Up to Builder Sentiment

According to the National Association of Home Builders, overall builder sentiment fell six points to November’s reading of 60. This was the largest decline in builder sentiment since 2016. Ongoing concerns over lot and labor shortages and rising costs of building materials were cited along with recently rising mortgage rates.

Demand for homes eased as potential buyers were sidelined by rising rates, shortages of homes for sale and approaching winter weather and holidays. Any Housing Market Index reading over 50 is considered positive, but steep drops in builder sentiment is considered a predictor of stabilizing market conditions.

National Association of Realtors®: Sales of Pre-Owned Home Sales Rise in October

Sales of previously-owned homes rose in October to a seasonally-adjusted annual rate of 5.22 million sales as compared to September’s reading of 5.15 million sales. Analysts estimated a reading of 5.18 million sales. While this reading suggests that buyers are active, an increase in home sales signals easing demand as compared to recent months when many buyers were sidelined due to extreme buyer competition for short inventories of homes for sale.

Mortgage Rates First-Time Jobless Claims Fall as New Jobless Claims Rise

Freddie Mac reported lower mortgage rates last week; rates for 30-year fixed rate mortgages averaged 4.81 percent, which was 13 basis points lower than the previous week. Rates for 15-year fixed rate mortgages averaged 4.24 percent and were 12 basis points lower.

Rates for 5/1 adjustable rate mortgages averaged 4.09 percent and were five basis points lower. Discount points averaged 0.40 percent for 30-year fixed rate mortgages, 0.50 percent for 15-year fixed rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

First-time jobless claims rose last week to 224,000 new claims filed as compared to expectations of 215,000 claims. The prior week’s reading was 221,000 new claims filed.

Whats Ahead

Economic readings set for release this week include Case-Shiller home price indices, new home sales and pending home sales. Weekly readings on mortgage rates and new jobless claims will also be released.

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