In many markets across the country, the number of buyers searching for their dream homes outnumbers the number of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search.
Even if you are in a market that is not as competitive, understanding your budget will give you the confidence of knowing if your dream home is within your reach.
Freddie Mac lays out the advantages of pre-approval in the ‘My Home’ section of their website:
“It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”
One of the many advantages of working with a local real estate professional is that many have relationships with lenders who will be able to help you through this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.”
Freddie Mac describes the ‘4 Cs’ that help determine the amount you will be qualified to borrow:
- Capacity: Your current and future ability to make your payments
- Capital or cash reserves: The money, savings, and investments you have that can be sold quickly for cash
- Collateral: The home, or type of home, that you would like to purchase
- Credit: Your history of paying bills and other debts on time
Getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and it often helps speed up the process once your offer has been accepted.
Many potential homebuyers overestimate the down payment and credit scores necessary to qualify for a mortgage today. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so.
Gerri Wadkins – Realtor/Owner
We Real Estate Group
- The cost of waiting to buy is defined as the additional funds it would take to buy a home if prices & interest rates were to increase over a period of time.
- Freddie Mac predicts interest rates to rise to 5.2% by the third quarter of 2019.
- CoreLogic predicts home prices to appreciate by 5.1% over the next 12 months.
- If you are ready and willing to buy your dream home, find out if you are able to!
Steve Wadkins – Broker/Owner
We Real Estate Group
For a while now baby boomers have been blamed for a portion of the housing market’s current lack of housing inventory, but should they really be getting the blame?
Here’s what some of the experts have to say on the subject:
Aaron Terrazas, Senior Economist at Zillow, says that “Boomers are healthier and working longer than previous generations, which means they aren’t yet ready to sell their homes.”
According to a study by Realtor.com, 85% of baby boomers indicated they were not planning to sell their homes.
It is true that baby boomers are healthier and are thus working and living longer, but are they also refusing to sell their homes?
Last month, Trulia looked at the housing situation of seniors (aged 65+) today compared to that of a decade ago. Trulia’sstudy revealed that:
“Although seniors appear to be delaying downsizing until later in life, as a group, households 65 and over are still downsizing at roughly the same rate as in years past.”
Trulia also explains that,
“5.5% of households 65 and over moved, pretty evenly split between moves to single family (2.7%) and multifamily (2.4%) homes. In 2005, these percentages were virtually the same, with 5.5% of senior households moving, including 2.5% into single family and 2.5% into multifamily homes.”
So, if these percentages are the same, what is the challenge?
Recent reports tell us that the older population grew from 3 million in 1900 to 47.8 million in 2017.
In addition, the Census recently revised the numbers from their National Population Projections:
“The aging of baby boomers means that within just a couple decades, older people are projected to outnumber children for the first time in U.S. history…By 2035, there will be 78.0 million people 65 years and older compared to 76.7 million under the age of 18.”
If you are a baby boomer who is not sure whether you should downsize or move to a warmer climate (other people are doing it, why not you?), let’s get together so we can help you evaluate your options today!
We Real Estate Group
If you’re selling your home, chances are good you’re familiar with the concept of staging your home. Real estate agents recommend your home look its best to prospective buyers, and home staging is a great way to ensure you receive top dollar. For our Home Staging we use Sweetland Interior Design 702-413-2774.
But did you know you should stage the exterior of your home too? Failing to update the look of your home’s exterior can cause buyers to get a bad first impression when they initially arrive to view your home. Whether your audience are luxury home buyers or you are selling your starter home, staging the exterior of your home will have a major impact in the sale of your home.
If you want to put exterior home staging to work, here are five elements you should consider tweaking.
Clean Your Exterior Windows and Screens
Nothing says poor maintenance like dirty windows and window screens. If your windows are caked with dust or muck from the last rainstorm, open house visitors are going to wonder what other maintenance jobs you haven’t attended to. Don’t give visitors the opportunity to question whether your home has been properly maintained or not; clean those windows and screens before authorizing an open house.
Refresh Your Gardens and Walkways
Just like dirty windows are a real estate faux pas, so are unkempt flower beds. Weeds and overgrown bushes tell visitors you can’t be bothered with the small stuff. Spend a day removing weeds and trimming flowers, or hire a professional landscaper to refresh your gardens. Landscape Company we use is Nevada Lawn Enforcement 702-742-3913. It is amazing what a refreshed garden can do to your home’s curb appeal.
Update/Clean Door Fixtures and House Address Signage
Something as simple as a new doorknob or address signage can give your home a refreshed look. You needn’t spring for a new door; just update the faceplate and/or doorknob. Purchase new address numbers from the local hardware store and you’ll have tweaked the look of your home’s exterior in just a few minutes.
Clean Patio Furniture
Whether you have chairs on your front veranda or a dining set on your back deck, tired patio furniture can cost you big dollars when it comes time to negotiate with a potential homebuyer. Dilapidated patio furniture instantly gives a bad impression and can cause potential homebuyers to request replacement furniture as part of their deal. Spruce up your existing furniture with a quick power wash, or replace it if it is beyond cleaning.
Simple tweaks to the exterior of your home can have a big impact on your home’s final selling price. By spending just a few days improving the look of the outside of your home, you can increase the amount buyers are willing to offer and make your home the cleanest real estate listing on the block. Will you be trying these exterior home staging tricks when you list your home for sale?
“We Have The Key To Your New Home”
Steve & Gerri Wadkins
We Real Estate Group
“Requiring a homeowner to pay income tax on forgiven or canceled mortgage debt would make the National Mortgage Settlement much less effective,” the letter states. The Mortgage Forgiveness Debt Relief Act and Debt Cancellation
The act, which is set to expire December 31, 2012, allows taxpayers to be excluded from paying taxes on forgiven debt from a foreclosure, short sale, or loan modification… In a release, Nevada Attorney General Catherine Cortez Masto explained the act is expiring at a time when homeowners are benefiting from the national mortgage settlement, which obligates five of the largest mortgage services to provide $20 billion in credited consumer relief.
http://www.dsnews.com/articles/forty-one-ags-sign-letter-urging-congress-to-extend-debt-relief-act-2012-11-20 RT #DSNEWS #WadkinsRealEstate
A reduction in premiums for mortgages could save an average borrower $1,000 a year on a $200,000 loan. Read this article below by NAR
The start of a new year brings excellent news for homeowners and homebuyers. The US housing market is finally on its feet again.
Over the last few years, the housing market recovered quickly. Home sale prices skyrocketed as foreclosures and short sales slowed, and millions of homeowners nationwide regained equity in their homes.
Today, we can finally say that the housing market is officially back. The vital signs of a healthy market are all there. From home prices to inventory, homebuyers and sellers are looking at a market full of opportunities.
If you’ve been waiting to sell your home, now may be the perfect time! Contact me today!
Steve Wadkins, Gerri Wadkins
There are some homeowners that have been waiting for months to get a price they hoped for when they originally listed their house for sale. The only thing they might want to consider is… If it hasn’t sold yet, maybe it’s not priced properly.
After all 13,808 houses sold yesterday, 13,808 will sell today and 13,808 will sell tomorrow.
That is the average number of homes that sell each and every day in this country according to the National Association of Realtors’ (NAR) latest Existing Home Sales Report. NAR reported that sales are at an annual rate of 5.04 million. Divide that number by 365 (days in a year) and we can see that, on average, over 13,800 homes sell every day.
The report from NAR also revealed that there is currently only a 4.4 months supply of inventory available for sale, (6 months inventory is considered ‘historically normal’).
That means less competition for buyers who are out in the market now, but more houses will hit the market soon with spring right around the corner.
We realize that you want to get the fair market value for your home. However, if it hasn’t sold in today’s active real estate market, perhaps you should reconsider your current asking price.
Approximately half a million homeowners who received a mortgage loan modification in 2010 through the government’s Home Affordable Modification Program, commonly known as HAMP, are due to reset in 2015 – and those homeowners will be facing slowly increasing monthly mortgage payments.
Will these homeowners be able to handle the payment increases, or will there be a massive wave of re-defaults?
The U.S Department of Treasury and Department of Housing and Urban Development (HUD) launched HAMP in 2009 as part of its Making Home Affordable initiative to provide relief for homeowners facing financial hardship by reducing monthly payments to affordable levels through lowered interest rates and modified loan terms. The goal of the modifications was to reduce monthly payments to about 31 percent of the homeowner’s income. According to Mark McArdle, Chief Homeownership Preservation Officer at Treasury, HAMP has saved distressed homeowners an average of about $547 per month (about 39 percent) on mortgage payments by lowering their interest rate in many cases to 2 percent.
There are some who are not sold on the effectiveness of HAMP. One of those is Bankrate.com Chief Financial Analyst Greg McBride, who said in 2009 that homeowners receiving a modification through HAMP were simply “kicking the can down the road” and now that we are in 2015, “we’re at the end of the road” because of all the HAMP mods due to reset this year. Furthermore, he said he thinks many homeowners will be “shocked” to find out that “permanent didn’t really mean permanent” and instead meant five years.
“What happens is that payment starts to normalize – that 2 percent increases by 1 percentage point per year,” McBride said. “So what’s going to happen is these homeowners are going to see their mortgage payments go up this year, next year, and in many cases, the year after that. That’s where the potential problem is. Household incomes have been stagnant and many homeowners don’t have the additional room in their budget to absorb higher payments. Even if they can absorb the first payment increase, the cumulative increase of payments in subsequent years could prove problematic.”
Just how problematic will the interest payment increases, known as “step-ups,” be? That remains to be seen, but even without the interest increases, re-default rates on HAMP mods have hovered around 40 percent for mods with a 2010 vintage.
As of the end of Q3 2014, the latest data available, HAMP has helped about 1.4 million distressed homeowners receive permanent loan modifications. Of the approximately 60,000 permanent modifications completed in 2009, the first year of HAMP, about 42 percent of those modifications were 90 or more days delinquent 42 months after the modification became permanent. Of the nearly 511,000 HAMP modifications with a vintage of 2010, that percentage was about the same for those with a 2009 vintage – about 41 percent. That is double the percentage of overall 90-day delinquency rate of all HAMP mods completed through the second quarter of 2013, which is 20 percent. McArdle said one of the main reasons why re-defaults on HAMP mods with a 2009 or 2010 vintage is because servicers did not start adapting to the the framework that HAMP created until 2011 and 2012. Also, prior to June 2010, verification of income was not required for a HAMP mod.
Treasury has been considering the possibility of re-defaults on HAMP mods and has ways of helping those borrowers for years. McArdle said they currently have a comprhensive response plan and have tools available to help borrowers handle the step-ups and avoid re-defaulting. He said the median increase for the first step-up after the five-year HAMP mod expires is about $95 per month nationwide, varying sometimes greatly from state to state. The median increase for the second step-up could be as much as $200, he said, although more than 90 percent of HAMP borrowers will still have an interest rate below 5 percent after three step-ups and therefore still have a lower monthly payment than they had before they received the HAMP mod.
“While re-default remains an unfortunate outcome for some borrowers, clearly without HAMP, national foreclosures rates would have been much higher and many borrowers would not have received the assistance they needed,” McArdle wrote. “HAMP continues to be the strongest available program for mortgage modifications. Receiving assistance through HAMP gives homeowners a valuable opportunity to strengthen their financial footing and stay in their homes.”
McArdle said that only a small percentage of borrowers who re-default on HAMP mods actually go into foreclosure. Many who re-default are later able to find solutions to avoid foreclosure. He said Treasury has really pushed its short sale program, increasing the incentive from $3,000 up to $10,000. Another program Treasury has touted lately for HAMP is the Pay for Performance Incentive, which allows qualifying HAMP borrowers to receive up to $10,000 in principal reduction on the life of the mortgage loan after the five-year mod expires.
“Of those homeowners who have not been able to keep up with their modified payments under HAMP, the majority have received other forms of assistance or reinstated or paid off their mortgage loans,” McArdle wrote. “HAMP requires servicers to reach out to any homeowner who falls behind on a modification to review all other assistance options, before the servicer starts foreclosure proceedings.”
McArdle is scheduled to be a panelist on the “Modifying Modifcation” panel at the upcoming Five Star Government Forum in Washington, D.C. on March 18. This panel will assess HAMP and its effect on stabilizing the housing market and assisting distressed homeowners.
With regard to the possibility of re-default, McArdle said Treasury is ready. One of the services offered is post-mod counseling for those that are at risk of re-default. Also, homeowners are notified 120 days prior to the first reset and 60 days before the first step-up.
“Treasury will maintain its oversight of participating servicers,” McArdle said in a note to servicers last March. “We will monitor the interest rate resets to ensure that if signs of homeowner distress arise, servicers are ready and able to help by providing loss mitigation options and alternatives to foreclosures.”
McBride said although a certain amount of HAMP re-defaults is unavoidable; it will likely not trigger a housing bust similar to the one the country experienced seven years ago.
“The numbers aren’t that big relative to what we saw during the housing bust and it’s spread out over a period of several years, so it’s not coming all at once,” McBride said. Compliments of DSNEWS