Tag: real estate

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Financial Real Estate

Single-Family Rents Rise Most In At Least 16 Years

Single-Family Rents Rise Most In At Least 16 Years

Rent on single-family homes rose by 12% from December 2020 to December 2021, which was more than three times the previous increase. It was the largest year-over-year increase since the CoreLogic Single-Family Rent Index started tracking rental data 16 years ago, and while the index growth managed to slow over last summer, rent growth is still higher than pre-pandemic levels when compared with the data from 2019.

What is the Single-Family Rent Index?

CoreLogic’s Single-Family Rent Index, or SFRI, tracks changes among single-family rental homes using a repeat-rent analysis to measure the same properties over time. According to the SFRI, there were record increases in both low-price and high-price rental properties, which contributed to the overall gain.

Single-Family Rent Growth by Price Tier

Rent costs for the low-price tier, which is defined as properties with rent less than 75% of the region’s median rental price, increased 8.3% last year, up from 2.4% in 2020. High-price rentals, which are defined as a property with rent prices greater than 125% of the region’s median rental price, rose 11% last year, up from 2.8% the previous year.

Growth by Property Type

During the pandemic, more renters chose to live in standalone properties in lower-density areas. A detached property is defined as a free-standing residential building, as opposed to an attached property type such as a duplex, townhouse, or condo. Rent growth on detached rentals increased 12.2% last year, compared with only 7.8% for attached rental properties.

Growth in Metro Areas

Of the 20 metro areas shown in the SFRI report, Miami had the highest year-over-year rent growth with 25.7%. Phoenix followed at 19.8%, then Las Vegas at 15.9%. These likely increased due to tourism returning to normal as pandemic restrictions lift.

Chicago showed the lowest rent increase at only 2.8%. Boston, Washington D.C., Philadelphia, and New York also showed low rent growth of under 5%.

Why is it rising?

More and more people are in the market for rentals as consumers continue to get priced out of buying a home. Many families can’t afford to pay the increasingly high asking prices for the low inventory of homes for sale, so they resort to renting a single-family home instead.

Although 93% of consumers believe that owning a home is a good investment, competition in the housing market forces more buyers to remain renters instead. Single-family rental units are the most popular choice since people want more space for their families, and as the labor market improves, the demand for larger single-family homes will grow as well.

Since occupancy rates are at a record high, rentals will keep rising in price and may become more difficult to find. Rental unit vacancies have practically disappeared since when one renter gives notice to move out, another renter swoops in to take over the unit. Gone are the days when rental units are available, so rental owners can charge more due to increased demand.

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Credit Financial Real Estate

Buying a Home With a Partner Who Has Bad Credit

Buying a Home With a Partner Who Has Bad Credit

Buying a home is one of the biggest purchases you will ever make. It takes a lot of time and preparation to buy your first home. Sometimes our partner has less than good credit which can complicate the process.

If you have a partner with less than perfect credit, you may want to read below. We will discuss tips to make the buying process better.

Tip 1

If you are married and want the best interest rate on a mortgage, you can buy a home using only one partner’s credit.  Most states consider a property that is bought during a marriage to be both party’s responsibility.

The partner with the better credit puts the house in their name, using their income and credit. While you may not be able to buy as large of a house as if you used both partners’ income, you will get a better interest rate. It will also help your odds of approval.

Tip 2

Save up for a little while longer, and put down a higher down payment. The bank wants to see that you can be responsible for the mortgage payments. If you put down at least 20% as the downpayment on the loan, the bank will see that you have the ability to save.

A higher down payment means a lower mortgage amount, which can help if one partner has bad credit.

Tip 3

Wait until your partner raises their credit. Sometimes waiting is not fun. But in the end, it is worth it. Have your partner take a credit repair course to understand why their credit score is low. Once they understand why they have poor credit, they can begin to fix it.

Credit repair can be done by eliminating debt, paying credit cards and bills on time, and not applying for new credit. After six months to a year, your partners’ credit can be in a better place. Which will help with mortgage approval.

Tip 4

If your partner has bad credit, maybe you should look at buying a smaller home. If one person isn’t good with finances it may not be wise to buy a home that they can’t keep up with. You want to avoid foreclosure at all costs when buying a home.

Think of circumstances where your partner may be the one responsible for the home. If you lose your job or become injured, will your partner be able to take over a large home?

Tip 5

If you want to buy the home of your dreams, but your partner has poor credit, add another stream of income. The more money you make, the more likely you are to be approved for a home.

All Things Considered

With everything you know about the importance of mortgage preparation, you will want to find a plan that works best for you and your partner. You are not out of luck getting a mortgage if your partner has bad credit.

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Financial Real Estate

End of Mortgage Relief May Boost Housing Inventory

End of Mortgage Relief May Boost Housing Inventory

As mortgage relief comes to an end, there’s going to be an onslaught of homeowners looking to sell their home, in order to pay for the mortgage and avoid foreclosure. Statistics show that there are more than 1.5 million homeowners who are 90 days late or more on their mortgage and aren’t in foreclosure.

So what does that mean for the housing market? What will the next few months look like? Read on for more details on what is going to happen and how the housing inventory is going to boost.

What is Going to Happen?

It’s predicted once those on mortgage forbearance programs leave in the next few months will increase the number of homes for sale by 15 percent. This increase is said to start showing in September and October when the federal forbearance programs end.

It’s also possible that the CARES act, which included the COVID mortgage forbearance, could be extended again. But, if that isn’t the case, there are a few things that homeowners who participated will have the option to do:

  1. Reinstatement: Here, you’ll pay a lump sum that covers the total amount your payments were reduced during forbearance along with interest and fees that accumulated during that time. Once reinstated, you’ll resume paying just as you did before forbearance.
  2. Repayment Plan: This method divides up the total amount you accrued during forbearance into a series of smaller payments. This is negotiable and payments are typically broken up into increments up to 12 months.
  3. Mortgage Modification: If you modify your mortgage, you completely change your whole loan to make monthly payments lower. Whatever you didn’t have to pay duing forbearance will just be added into your remaining balance.

How Will the Housing Inventory Boost?

In May 2020, there were approximately 4.7 million people in active forbearance during the shutdown. July of 2021 saw that number fall to around 1.9 million people. A Zillow report assumes that roughly 25% of those borrowers listed their homes in order to escape foreclosure. If that trend continues, the housing supply will increase by 31% with 26% of those houses being sold within the next three months.

This is going to be quite the change from the current supply as it’s currently at its lowest level in a long time. In fact, this is the lowest level the housing supply has been at since it was first tracked in the 1980s.

Parting Thoughts

Although the end of mortgage relief may mean some are forced to downsize, it will bring newfound relief to those who have been on the hunt for a while. If a new mortgage relief program isn’t proposed or passed before the end of the CARES act, the market boom is expected to have the most buzz between October and January.

If you’re participating in the mortgage forbearance program, you may want to start preparing yourself now. For those of you who have been on the hunt for a new home for a while now, it’s time to start getting excited again.

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Financial Real Estate

Delta’s Silver Lining? Mortgage Rates Stay Low

Delta's Silver Lining? Mortgage Rates Stay Low

Delta doesn’t really have a silver lining because there is nothing good about the delta variant of the coronavirus. The resurgence of the pandemic that started almost 2 years ago has been extremely difficult. But for home buyers, it might be a silver lining because mortgage rates have been at an all-time low.

Many people assumed that mortgage rates and housing costs would rise after the pandemic was almost over because mortgage rates have been at an all-time low since the winter. However, many people are wondering why mortgage rates have stayed so low even though many other parts of the economy are steady or even increasing.

Mortgage rates are tied to yields on treasury bonds. These are influenced by investor concerns about inflation and economic growth. Right now, inflation is extremely high because the overheating economy pushed yields higher.

The start of the contagious delta variant also sent inflation through the roof. The delta variant led to delayed reopenings and lower the growth of the economy. This directly means lower long-term interest rates and mortgage rates will continue to stay low. 

Lower rates mean that borrowing for mortgages is much lower than it normally would be. Another issue though is that inventory for houses is lower than normal because fewer people are moving and relocating for many different reasons. The supply of houses has improved some, but it still proves to be a major issue.

What Do Lower Interest and Mortgage Rates Mean for Me?

If you are in the home buying market, now is the time to buy a house. Even though the supply is low, it’s steadily increasing. Low mortgage rates and low interest rates mean you will get a house for a much cheaper price point, and you will be able to get a loan with lower interest than normal. Both of these factors mean now is the perfect time to buy a house.

However, on the other end, selling a home is not easy at this time. You might even get less than you paid for. If you have a lower price point, you might be able to sell the house easily but you will not make money off of it.

Should I Buy a House Now?

If you are looking to buy a home for the first time, now might be the best time. You will have a hard time finding rates and interest as low as they are now. Mortgages might even be lower than rent prices on certain homes and apartments depending on the state and area you live in.

Now is also the time to buy real estate property or rental properties. You will be able to get homes for lower price points and then be able to rent them once the economy gets back up and people begin to move and rent new places.

Even though the delta variant of COVID has caused a lot of damage, the housing and mortgage rates are at an all-time low.

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Financial Real Estate

15 Tools Every New Homeowner Should Own

15 Tools Every New Homeowner Should Own

Moving into your own place for the first time can be exciting and stressful. Making a list of all the things you might need when moving can be overwhelming. It’s often the simplest and most useful thing we forget. We might also not realize we need something until after the fact. Getting some of these tools will make sure you are prepared for any situation in your new home.

1. Flashlight

Hopefully, your power never goes out, but you never know what could happen. Keeping a flashlight in the house will give you a way to have some light in the case of power outages.

2. Duct Tape

Duct tape is known for being able to fix anything. It can be used to make temporary fixes while you want a professional to come and permanently repair the problem. It can also be used to tape pipes to keep them from bursting or leaking water.

3. Plunger

Sometimes this one is needed in a pinch and unless you thought of it ahead of time, you might find yourself stuck without one. They can be used to unclog sinks or toilets. They will often fix the problem very quickly and effectively.

4. Tape Measure

You never know when you might need to measure something. Tape measures are more versatile because they can measure larger areas including rooms and walls. This can help if you are installing something or doing another home project.

5. Safety Glasses

These can be used in cases of emergencies or if you need to mix chemicals. They can also be used when you are using a power tool.

6. Screwdriver Set

A small one and a large one are good ideas because they can reach every size area. Manual ones are also less likely to damage screws.

7. Wire Cutters

These can cut through wires and maybe even small nails depending on the quality of the pair.

8. Safety Mask

Paints can sometimes be toxic. So, if you are painting your home, you might need to wear a safety mask. They can also be worn if you are in a dusty or dirty environment.

9. Claw Hammer

You can use this to drive and remove nails. Make sure to get them in a variety of sizes.

10. Torpedo Level

This can help you hang paintings and another décor in a straight line making your home look more elegant.

11. Hacksaw Tool

You can use this tool to cut through metal objects like bolts and brackets.

12. Caulking Gun

This is great for sealing up cracks and gaps you may have in your structure.

13. Wrench Tool

This is great for tightening bolts or fixing pipes. Consider getting an adjustable one.

14. Pliers

This can help you pull out nails and bolts. Make sure to get one with flat and curved areas.

15. Wrench Sets

This gives you an open and closed loop. This lets you use remove bolts that are standard and metric sizes.

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Financial Real Estate

10 Investments to Boost Your Home’s Value

10 Investments to Boost Your Home’s Value

Selling your home can be a long process that takes many appraisals and real estate agents. They may recommend you do some things to increase the value of your home. If you know you want to sell your home soon, you can start making these investments now, so you aren’t stuck doing several at the same time.

You might also have already completed some of these if you have ever made home renovations in the past. Check the following guide to see some simple investments you can make to increase the value of your home.

1. Brighten Up The Space

Homes that are light and airy usually sell much faster. Consider adding some lighting to important rooms like the kitchen and bathroom. You can also add dimmer switches to make the lighting in all the rooms much more inviting.

2. Update The Plumbing

Make sure known of the pipes are rusty or old. Consider updating the pipes to plastic tubing because they will last longer. Try not to have too many new holes when updating the plumbing.

3. Focus On The Kitchen

The kitchen is one of the first rooms people see, so it needs to be updated and elegant. Consider doing a simple remodel that could include new cabinets, new counters, or more modern appliances.  Make sure the kitchen flows well and has plenty of room to prep and cook food.

4. Finish The Basement

Regardless of whether you use it not, finish the basement. Potential buyers will be willing to pay more if a basement is already done and doesn’t need additional work. This also adds square footage to the home when you are putting it on the market.

5. Update The Bathroom

This doesn’t have to be a big remodel as it usually isn’t one of the top-selling points. You can always add new lighting or add some new paint. Fixing and cleaning the grout will also go a long way in adding value to your home.

6. Add Wood Floors

People are willing to pay more for wood floors as opposed to laminate. You can also use engineered wood if it’s cheaper. You can add them to the main rooms or every room.

7. HVAC Replacement

A new HVAC replacement can make your home more energy efficient which is a huge selling point. Adding in a new unit can make your home value much more.

8. Update The Landscaping

Adding some landscaping to the front or backyard can increase your home’s value by quite a bit. It also makes the home stand out.

9. Add Attic Insulation

This can be DIY and very cost-effective. It can make your home warmer and also make it more energy-efficient. Adding insulation to doors and windows can also add energy savings.

10. Get Rid Of Panels

Panels on walls and floors instantly make your home look old. Try replacing them with something more modern and elegant. This will make people much more likely to buy your home.

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Financial Loans Real Estate

Pros and Cons of Automatic Mortgage Payments

Pros and Cons of Automatic Mortgage Payments

When it comes to automatic mortgage payments, there are numerous benefits as well as drawbacks of this feature. Here we have mentioned some common things that you need to know before opting for automatic payments.

Pros of Automatic Payments

Automatic mortgage payments are the most common method people use to manage mortgage loans. Here are some benefits of online payments that encourage people to opt for this approach.

Timeliness

The biggest advantage of using this method is peace of mind, as you don’t need to worry about late payments. Instead of remembering to make monthly payments online, you can let your bank take care of your payments. Besides, automation can help you boost your credit score and develop a record of on-time payments.

Sustainability

If you are one of those who prefer eco-friendly methods, setting up automatic mortgage payments is ideal for you. This is because by using automatic payments you don’t have to use more paper, as you have to write a few checks and buy few stamps. Hence, you will use a paperless billing method that is safe and secure for the earth. Not to mention, you will also contribute to reducing emissions by receiving and sending fewer emails.  

Security

Although some people fear that automatic payment methods are not safe, there are many reputable institutions that use secured methods for payments. These organizations use advanced security measures for online payment mechanisms. In fact, you choose a risky method when you use an unsecured mailbox to send a payment via checks. These paper bill payments also include your financial information, such as your credit card number or account number.

Cons of Automatic Payments

While automation offers many benefits, it also has its drawbacks.  Here are some cons that you need to know about online mortgage payments.

Overdraft Fees

In some cases, payments can fluctuate in amount, and if you don’t notice, you might experience an overdrawn account. Overdraft fees can greatly vary, but the average fess is $34. In this case, it’s important to track your bank account and only leave enough money that can cover your automatic payments.

Unsubscribing Problems

This is the most common problem that people face. If you find the method invaluable and want to unsubscribe it in the future, you may experience several problems. For instance, the institute that offers you an automatic mortgage payment option may not respond to your request. In other cases, the process is too lengthy and complex that it takes days to unsubscribe automatic online payments.

Costly Mistake

Another problem is that automatic payments can do lead to costly mistakes. For instance, your home mortgage company can accidentally withdraw monthly payments twice at the same time. Although these mistakes are rare, they can still happen. You also need to know that recovering this amount can also be a headache for you.

Automatic Payments Bottom Line

So, now you may decide whether you need to opt for automatic mortgage payments. It is important to note that possible problems greatly depend on your chosen organization that makes payments on your behalf.

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Financial Real Estate

How To Be Approved For A Mortgage

mortgage approval for buying a home

As we continue to come back from the significant recession that the housing bubble caused, more and more people are thinking about buying a home. With many being first-time homebuyers, we’ve compiled a list of the essentials you’ll need to know to get mortgage approval.

1.   Look At Your Debt-To-Income Data

The very first step to mortgage application preparation is to determine your monthly income as well as your debt payments. Your potential lender will want to see evidence of employment, generally going back two years, but often a few recent pay stubs can get you started with many lenders.

If you are one of the millions of Americans who are self-employed or have variable income such as performers, be prepared to have that process be much more involved. Getting the best mortgage overall, as well as the best payments and interest rates, is going to be dependant on your debt to income ratio.

2.   Clean Up Your Credit Health

This is often one of the largest challenges for many people. Your credit history report and your credit score will be instrumental in your lender’s eventual decision. You should aim to have a FICO score of 680-700 as a floor. However, if your credit score is only missing 680 by a small margin, you may want to look into an FHA loan, which has a little bit easier approval requirements in some cases.

3.   Calculate Your Mortgage Budget

Before you make an appointment with any potential lenders or mortgage officers, you will want to know for sure, how much house you can afford, and what you can commit to in terms of a monthly payment. This payment will include your taxes, fees, and insurance, and should not be more than 33%-35% of your pre-tax income. This can be a difficult stage, since many mortgages have variable interest rates, meaning your payment could fluctuate at some point in the future.

4.   Plan To Save For Your Home Down Payment

This is a very significant step and can make or break your house hunt. Many lenders will require you to be able to put at least 10% down unless you are participating in an FHA loan or other special lending program. If you can put at least 20% down, you can avoid having to obtain PMI, or private mortgage insurance, to protect your lender against a possible foreclosure of the property before it has enough equity built up.

5.   Figure Out The Best Time To Apply

You can often get a pre-qualification without a hard credit pull. It will however stay on your credit report for some time. A pre-qualification can give you a good indicator of whether you can obtain a mortgage at a glance, and is often a very strong indicator of being a serious buyer.  You can often get a pre-qualification letter that will be good for 60-90 days depending on the lender, it’s non-binding, and will put you in a great position to start looking around.

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Financial Real Estate

10 Questions to Ask Your Mortgage Broker or Lender

mortgage broker

When you’re getting ready to shop for a mortgage broker or lender, you are preparing to make a huge financial commitment. Things can go as expected, but in some cases, there are may be significant fees that aren’t spelled out. Some lenders may even try to sell you on a different type of loan that could lead you into years of financial challenges.

1. What Loan Is Best For Me?

Any good, reputable broker is going to want to know more about you before they start loaning you large sums of money. You wouldn’t expect a medical diagnosis without any testing, your mortgage should be no different.

2. What Is The Interest Rate AND The Annual Percentage Rate?

Many brokers will calculate the APR slightly differently, and there is no APR for adjustable-rate loans. Be sure you have all info needed about your loan.

3. What Size Down Payment Do You Need?

Most sources will recommend about 20%, but that is not always needed. If you have good credit, you may be able to get a loan with less than 5% down. Lenders tend to increase closing costs and monthly payments with lower down payments.

4. Are There Discount Pints Or Origination Fees?

Discount points are tax-deductible, but each cost 1% of the total loan amount. Some lenders also charge origination fees for processing your loan application.

5. What Are The Total Costs?

Ask about the total costs. From the broker fees to any other fees that may be charged by a third-party. This can be appraisals, credit pulls, inspections, escrow, and more. There should be a legally required copy of the Loan Estimate that is given to you, which will include this information.

6. Are Fixed-Rate Loans Available?

Interest rates change daily depending on the Fed. This means that if you can get a loan with the interest rate locked in, it could mean saving thousands over other loan terms. Ask about fees though, some lenders charge for fixed-rates.

7. Are There Prepayment Penalties?

In some states, these penalties are not even permitted, therefore it’s very important to ask. Some penalties force the buyer to pay additional interest if you pay off early. Ask how long the financing offer was on the table.

8. Do You Do In-House Approvals?

Most loans need an underwriter’s approval, which can be dependant on conditions. If your lender does its own underwriting, that means your loan may be processed quicker. VA and FHA loans are known for taking longer.

9. How Long Is Needed To Fund The Loan?

In many cases, the time to fund a loan is around 40-45 days. You will have a closing date, so things will need to be coordinated. Inquire about the usual turnaround time, and if there is anything that can delay closing.

10. Are There Any Guarantees For On-Time Closings?

Closing can be stressful, and many contracts will include a date to close escrow by. This is usually subject to the ability of the lender to close on-time.

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Financial Real Estate

Selling Your Home? How Not To Lose Money

selling your home

Selling your home can be a challenge when you don’t know what it’s worth, or how to get the best price for it. We have a few great tips on how to maximize your profit potential when selling.

It Starts With An Experienced Agent For Selling Your Home

Working with an agent that has significant experience in selling homes in your area. You are going to want someone who is as invested in getting every dime of value out of your home as you are.

Occasionally sellers will try to save money by using an agent with lower commissions, but you are going to get what you pay for, as the saying goes. If an agent who charges even a single percentage point more can bring you 5% more profit, you’re already up by 4%.

The Price Has To Be Right The First Time When Selling Your Home

Pricing the home right initially is a huge benefit. The home will lose value the longer it’s on the market without selling. Opening the listing at the right price will benefit you in a couple of ways. First, it will encourage a short time on the market. Second, overpricing can not only cost you time, it can cost you money, as people will know that it is overpriced, and will use that in negotiations. Leveraging a skilled agent can help you get the best price initially.

Make sure you have personally researched local listings and recent sales. Look for trends. Touring open houses can also give insight into what is on the market. Call your bank and asking for a beneficiary demand can also give you an idea of what the home is worth.

Preparation Is Key

This one might cost a little bit of money, but the value added to the potential sale should far exceed what you put into it. This is the stage where you spruce up the cosmetic appearance and curb appeal of your soon-to-be-former home.

Basic home repairs can count for a lot here, as can a fresh coat of paint in several key rooms. Also make sure you pay attention to your landscaping, maybe hire a crew for an afternoon to get it ready for the weekend showings. This can help first impressions be great.

Keep An Eye On The Fees

When you receive an offer from a potential buyer, the offer will list the fees the buyer expects the seller to pay. Sometimes, the buyer requests inspections or other closing concessions. These can all be negotiated, and if they request a percentage toward costs, you might consider raising the price to help offset that.

Be sure to negotiate, particularly on the fees. The same goes for a home warranty, if the buyer wants reports for inspections or pests, for example, make sure you cap the potential expense that may make you liable for. Also shoot for the end of the month for closing, so that you can save a little money in interest.6