Home Loans In The Now
As far as home loans go, Ellie Mae is in the know.
The tech company makes available automation software to a big portion of the mortgage finance industry. Ellie Mae gets the complete picture of residential sales and financing as it deals with more than a third of all U.S. home loans. From its vantage point, it gets an immediate picture of the reality.
Recently Ellie put out a news release that included some thought-provoking facts that may interest home owners or future home buyers. They are well-timed pointers about the trends of U.S. home loans. Also provided are details about what is necessary when applying and what amount of money will be needed. If you are applying soon, consider what follows. Here are some of the latest facts about this year’s late summer and early fall activity.
Home Loan Changes
- Refinancing loans are down from 38% to 29%.
- September’s 30 year interest rate decreased just a bit to 4.91%.
- The average FICO score increased to 727.
- ARMs or adjustables rose as a percentage of loans given, at 7.2% of the market. This is up about half a percentage point from August which is no surprise since home prices have increased.
- The time it takes to close stayed the same at 45 days.
It is true a home must sell two times: first to the buyer, and then to the lender. If you are looking to buy or sell soon, being knowledgeable about trends in residential finances will make the process go smoother. We keep apprised of all the latest information and trends. Call today for a no cost, no obligation consultation.
Selling Your House? What to Do First
In advance of selling your house, there is one not often thought of step to consider. It will make the process more financially worthwhile. This step is not exactly obvious. However, when you consider the larger financial picture, it is extremely wise.
This often-ignored step concerns your credit. You may not think your credit is important when selling your home. Rather, you feel certain it is only the home buyers’ credit that is relevant.
Selling Your House Is Just The Beginning
That is not quite the reality. Remember selling your home is only the first step. Step two is buying your next home. If your financial picture is good, it will likely become more so after the profits of selling your home. It’s a fact that a higher credit score will get you lower mortgage interest rates when purchasing your next home. Even a tiny percentage point gain can lead to a large difference in “cash out” in the long term.
You may be thinking what can I do to improve my credit. Apart from the well-known advice like paying credit cards in a timely fashion, another step might be to take out a personal loan. You should consider doing this even if you do not need a loan.
However, it is important to always ask your CPA or other financial advisor about any piece of financial advice. Still, as J.M. Simon and Brady Porche report, if you desire a high FICO score that will get you the best rates and highest limits you are “going to have to mix it up a bit.” You must construct a credit profile that shows you use different kinds of credit responsibly. Varieties of credit used is one of the five factors lenders look at. It influences around 10% of your FICO score.
Getting a personal loan or using some other previously unused type of credit can better your score. Remember to plan ahead, these types of credit can take some time to register.
Selling your house is a huge high point for any family. It must be planned and implemented well. Just give us a call. We can make sure it happens!
Home Buyer! What Are Your Questions?
Recently the National Association of Realtors compiled a list of responses to common questions a typical home buyer might ask their agents. The list is as follows:
- “How much should I spend?” You must look at your entire financial picture, which can be simple when you use a “house affordability calculator.” Skip past the ads listed first; most will ask you for your personal details before giving you a result.
- Can I sell my home and buy one at the same time?” This would include an understanding of possible offer contingencies. Also, some sellers choose to rent while house searching.
- “What will the seller agree to take?” The NAR’s proposal is to take 5% off the list price. However, every circumstance is unique. I believe a better suggestion would be to bear in mind the seller’s information and current market comps. Also, always get your agent’s take.
- “What about a home inspection? Is it necessary?” Yes! As a home buyer, it must be done. When a home appears to be in perfect condition, it can be enticing to just skip the inspection. However, the report produced by your home inspector will be a worthwhile use of your time and money. You may find yourself looking at it long after you have settled into your new home.
- “When is too late to back out?” You will likely lose your deposit money if you change course without a reason. However, a good offer should include provisions to cancel a purchase for reasonable reasons like inspection conclusions and loan terms.
One thing is for certain about the typical home buyer, they will have many questions before they have chosen their perfect home. We are always here to answer any questions you may have! Call today!
Luxury Home Buying on a Budget
The National Association of Realtors is most often unadventurous and steady on the subjects it publishes about. Their content must appeal to towns large and small across the country. As real estate is one of the largest industries in the country, the association representing its professionals must be extremely cautious in its declarations. Given these facts, it was striking to see in the Realtor website a step by step guide on purchasing a luxury home for less. Personally, I have always found luxury homes to be far more expensive than standard homes, so I was very curious about their thoughts.
Interestingly enough, they had many great points on the topic. The “6 Sneaky Tips for Buying a Luxury Home Without Wads of Cash” are practical tips on becoming a savvy shopper. Showcasing them as a list was a great way of presenting them to an interested audience. I can also add a few more tips for those seeking to shop for a luxury home.
Their first tip recommends waiting for the cold and short days of winter, including around Christmas, where there aren’t as many prospective buyers actively searching. Also, it recommends trying to find a motivated luxury home seller as evidenced by price drops.
The last two tips are to peruse the foreclosure listings and to consider borrowing from retirement savings. These two tips need to be done cautiously. First, with foreclosure buys it is important to make sure it will not be overly costly to make any necessary repairs. Also borrowing from your retirement funds should likely be done with professional assistance.
A straightforward tip I would add is to make an honest assessment of the money necessary to maintain your luxury home. It can be extremely expensive to pay for its upkeep – and allowing it to fall apart, doubly so. You should always consider starting with a non-luxury home you can renovate. Be patient and begin the process of working your way up to purchasing a luxury home. This is the most obvious route and is in fact how most people get to live luxuriously.
My last tip is to reach out to our professional real estate team. We are here to make your plans a reality. Call today!
HOA and Condo Associations: The difference.
When looking at the latest real estate listings you most certainly have seen the monthly fees connected with a “Homeowners’ Association” (HOA) or “Condo Association.” They are both monthly payments that owners must pay beyond property taxes.
You may think of these two separate fees as being the same. They both characterize an amount of money that occupants pay to cover everyday upkeep and repairs that all residents encounter. However, there are key factors that distinguish the two. Being cognizant of these differences will steer you to take one necessary action that can be extremely advantageous.
HOA and CA
The main contrasts between HOAs and CAs result from the two distinct types of ownership. Homeowners’ Associations most often are comprised of dwellings where each resident owns their homes and land. They likely share some common spaces. In one HOA that space might be a patio, a garden, or even a swimming pool or fitness area. In another HOA, the joint space might simply be a small flowerbed with a bench and a sign.
Now for a Condominium Association you will find that the shared commitments are more wide ranging because of the type of ownership and what it entails. While the condo owner owns his individual unit, he must share the obligation for the building and surroundings. (Where does the unit end and the building begin? You can clearly see how vital the differences can be).
Now there is one “necessary action” that you can take that will be “extremely advantageous.” When thinking about current condominiums available, or ones that list an HOA, make sure you have obtained an up to date copy of the agreements you will be bound to if you sign on the dotted line.
Most importantly, make sure the list is current!
HOAs and Condo Associations can both be wonderful resources in caring for what is likely one of your biggest investments. Do not wait until the day you sign to get a copy of the rules and regulations. Otherwise you may be surprised at the additional expenses.
When you work with us, we will be there through the entire process to ensure you get all the facts you need. Contact us today!
Homeowner’s Insurance: How to Save!
You likely may not be considering the proximity of a firehouse when purchasing a home. However, according to The Wall Street Journal, residing near a firehouse has many benefits including, of course, safety. But did you know it could translate into a decrease in your homeowner’s insurance premiums?
True, not all homes are going to be close to a firehouse. However, we all know the crucial role homeowner’s insurance plays in protecting the home and its belongings. Below are three tactics you could implement now to reduce your insurance premiums.
Three Tips For Buying Home Insurance
Although not always the most pleasurable experience, shopping around to see what competing companies offer is one of the most powerful tools you have available. One great example is the knowledge you will gain by scouring the reviews of past and present customers. Visiting the website of the National Association of Insurance Commissioners can help call to your attention critical distinctions when choosing your homeowner’s insurance company.
We often think we need to insure our homes for the full price we paid. If you purchased your home at $500,000 you should insure it for that amount, correct? Actually, no. If you experience a major loss you probably will not need the entire purchase price to reconstruct the home. Why? Because the purchase price contained the value of the land also. However, you still need to consider present day costs. Make a full inventory so you do not underestimate the value of your belongings.
Even though insurance companies have differing discounts the following considerations may result in a reduction of your bill.
- How long have you been with the company?
- Senior discount
- No claims in recent history
- Sprinkler system or smoke detectors
- No smokers in the home
- Multiple policies with the same company
- Improved credit score
- Security features such as alarm system or cameras
Yes, most of us will not be moving next to a firehouse. But we can save on our homeowner’s insurance in other ways. Give us a call today if you have any questions!
Prices: The Real Deal
For certain, Coral Springs has been undergoing some residential price increases. Homeowners from decades past would think it was a work of fiction if you were to tell them what average Coral Springs listing prices are these days.
However, these prices are steals compared with what typical Manhattanites pay. According to the Wall Street Journal, that is the case with walk-ups.
“Manhattan walk-ups” are residences without the convenience of an elevator. When you consider all the possessions we take in and out of our homes in a typical week, walk-up living is no picnic.
That is especially the case for anyone living above the third floor. Consider the amount of times we go in and out of a Coral Springs front door on a typical day, then multiply that by the number of stairs involved.
You can certainly see what the average walk-up tenant is facing. Consider now, what if you were a couple carrying an infant or a senior citizen with a dog?
Despite the substantial effort needed to simply walk into your front door, last week, the Journal stated how “more and more people are looking past the fact that they are climbing stairs.” The specifics are riveting – but please take a seat before we delve further.
Prices for buildings with elevators are what you would anticipate. Penthouse views are expensive – much costlier than first or second floor apartments.
Now is the time to take a seat. Just consider a “narrow” 5th floor East Village co-op unit that just sold for 1,900,000. The deal was reached less than 3 weeks after it was listed. It included a bidding war which comprised of seven offers going over the asking price.
Asking Prices for Walk Ups
It joined more than 60 Million Dollar Plus high floor walk-up sales in Manhattan. The Journal reported that asking prices “may be rising.” The understatement went along agreeably with one optimistic appraiser’s assessment that climbing so many stairs “is like having a free health club.”
Yes, Coral Springs buyers have been witnessing some asking price increases. However, I can confidently say most Coral Springs properties listed now are, relatively speaking, complete bargains. I hope you will contact us if you are considering buying or listing!
Are Home Appraisals Keeping Up With The Rising Market?
Home Appraisals Catching Up To The Rising Real Estate Market
One of the most difficult and unpredictable times in a home purchase and sale is the home appraisal.
Up until that point one side of the transaction is in control, whether buyer or seller.
But the home appraisal is different, a bad home appraisal can damage a good deal beyond any reconciliation.
Once the appraiser determines the value of a home and submits the home’s appraisal report it can be very difficult to dispute that value.
That’s why this week’s news pertaining to the continued rise in the value of homes is certain to make many homeowners very very happy. However, with the good news there always seems to be some level of bad news right behind it. The unintended consequences so to speak.
The mortgage loan industry appears to be a group of folks just so affected by rising home values. Specifically, when it comes down to the home appraisal. Broward County home appraisals appear to move to the front of the line when mortgage lenders are preparing their offers for mortgage. Mariam-Webster’s Dictionary defines an appraisal as “a valuation of property by the estimate of an authorized person.” In mortgage terms the appraiser gives an independent, third party assessment of the subject property. Lenders rely on an accurate home appraisal as a backstop to the loan. The value they are lending on must be recoverable should the borrower fail to repay the borrowed amount in full.
Which is why the steady rise in home values is having a less than desirable consequence on home appraisals. So long as a steady inventory of homes are selling in the recent weeks and months this not an issue at all. Considering the fact that home appraisals are dependent upon comparable sales to determine property values, this could become an issue. Especially if inventory and sales dry up, and there are less comparable sales to work with. This will cause the appraiser to look further back into the past for comparable sales. With a rising market that can cause some problems. One being, older sales won’t reflect recent price gains.
In a seller’s market this it is not unheard of. In fact, right here in Coral Springs we are experiencing lower than usual inventory on the market. Homes for sale just can’t keep up with current demand.
One likely outcome in this scenario could be that the price that the buyer and seller agreed upon will end up being higher than the value the appraiser believes, based on comparable sales. The smallest difference in value could be just enough to quell the mortgage.
Now don’t get me wrong, lenders are in the business of lending money. Which means they like to lend money and they’re especially happy when these deals work out. So rest assured they are certainly aware of this phenomenon and are keeping track. One such company is Quicken Loans. Their HPPI (Home Price Perception Index) measures the disparity between what a refinancing homeowner is seeking, as compared to the value the appraiser comes up with.
The best news (or at least on a national level) is that the gap between homeowners, home buyers and appraisers is closing. As we know real estate is hyper local, but this trend appears fairly widespread nationwide. By mid-November 2017, the difference reduced for the 5th consecutive month. As of this writing the difference is within 1%.That’s great news for everyone.
Coral Springs and Parkland appraisals and mortgages are very important components to the home buying experience, but it doesn’t end there. Our job at The Miranda Team is to guide buyers and sellers, and to fit all of the pieces of a real estate transaction together and ensure a smooth transaction along the way. Home appraisal and all. So call us to see how we can help your next real estate transaction be the best one yet.